Sheffield Corp. incurs the following costs to produce 12800 units of a subcomponent: Direct materials $10752 Direct labor 14464 Variable overhead 16128 Fixed overhead 16200 An outside supplier has offered to sell Sheffield the subcomponent for $2.85 a unit. No fixed overhead costs are avoidable. If Sheffield accepts the offer, by how much will net income increase (decrease)? $(3712) $4864 $21064 $(11264)

Sheffield Corp. incurs the following costs to produce 12800 units of a subcomponent: Direct materials $10752 Direct labor 14464 Variable overhead 16128 Fixed overhead 16200 An outside supplier has offered to sell Sheffield the subcomponent for $2.85 a unit. No fixed overhead costs are avoidable. If Sheffield accepts the offer, by how much will net income increase (decrease)? $(3712) $4864 $21064 $(11264)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EA: Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special...

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Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?
Marigold Corp. incurs the following costs to produce 12200 units of a subcomponent: Direct materials $10248 Direct labor 13786 Variable overhead 15372 Fixed overhead 16200 An outside supplier has offered to sell Marigold the subcomponent for $2.85 a unit. No fixed overhead costs are avoidable.If Marigold accepts the offer, by how much will net income increase (decrease)? $(3538) $20836 $4636 $(10736)
Coronado Industries incurs the following costs to produce 8600 units of a subcomponent: $7224 Direct materials 9718 Direct labor Variable overhead 10836 Fixed overhead 16200 An outside supplier has offered to sell Coronado the subcomponent for $2.85 a unit. If Coronado accepts the offer, by how much will net income increase (decrease)? o $(2494) O $3268 $(7568) O $19468 4)
Sheffield Corp. incurs the following costs to produce 9000 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $9000 O $28950 O $(3500) $8950 O $(3250) 12500 12200 20000 An outside supplier has offered to sell Sheffield the subcomponent for $2.75 a unit. No fixed overhead costs are avoidable. If Sheffield accepts the offer, by how much will net income increase (decrease)?
Waterway Industries incurs the following costs to produce 10600 units of a subcomponent: Direct materials $8904Direct labor 11978Variable overhead 13356Fixed overhead 16200 An outside supplier has offered to sell Waterway the subcomponent for $2.85 a unit. If Waterway accepts the offer, by how much will net income increase (decrease)? a. $(3074)b. $(9328)c. $4028d. $20228
Sheffield Corp. incurs the following costs to produce 10500 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $(3600). $9200 Ⓒ$8150. $950. $(950). 11750 13000 An outside supplier has offered to sell Sheffield the subcomponent for $2.80 a unit. No fixed costs are avoidable. If Sheffield accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be 20800
Oriole Company incurs the following costs to produce 10200 units of a subcomponent: Direct materials $8568 Direct labor 11526 Variable overhead 12852 Fixed overhead 16200 An outside supplier has offered to sell Oriole the subcomponent for $2.85 a unit. No fixed overhead costs are avoidable.If Oriole accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be $(276). $7476. $276. $(3600).
Nelly Technology manufactures a particular computer component. Currently, the costs per unit are asfollows:Direct material P 50Direct labor 500Variable overhead 250Fixed overhead 400Fur Inc. has obtained Nelly with a offer to sell 10,000 units of the component for P1,100 per unit. IfNelly accepts the proposal, P2,500,000 of the fixed overhead will be eliminated. Should Nelly makeor buy the component?
Bramble Corp. incurs the following costs to produce 12000 units of a subcomponent: Direct materials $8400 Direct labor 12000 Variable overhead 12000 Fixed overhead 19000 An outside supplier has offered to sell Bramble the subcomponent for $2.15 a unit. No fixed costs are avoidable. If Bramble accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be O $(3600). $10200. O $(3000). O $3000.
San Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8,400 Direct labor 11,250 Variable overhead 12,600 Fixed overhead 16,200 An outside supplier has offered to sell San Clemente the subcomponent for $2.85 a unit. If San Clemente accepts the offer, by how much will net income increase (decrease)?
Coronado Industries incurs the following costs to produce 9100 units of a subcomponent: Direct materials $7644 Direct labor 10283 Variable overhead 11466 Fixed overhead 16200 An outside supplier has offered to sell Coronado the subcomponent for $2.85 a unit.If Coronado could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by $(1724). $6458. $458. $(5639).
Harmony is currently producing 100 units of a necessary component part by incurring $60,000 in direct materials, $12,500 in direct labour, $22,500 in variable overhead, and $15,000 in fixed overhead. If Harmony purchases the component externally, $10,000 of fixed costs can be avoided. What is the external price where the company is indifferent between buying and selling? $950 $1,050 O $1,000 O $1,100 Save for Later Submit Answer