Answered: C Direct materials 1 2 Direct labor 3…

C Direct materials 1 2 Direct labor 3 Variable MOH Fixed MOH 560,000 105,000 70,000 455,000 1,190,000 4 5 Total manufacturing cost for 70,000 units 6.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 7MC: What is the cost of direct labor f the conversion costs are $330.000 and manufacturing overhead is...

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

InteliSystems needs 79,000 optical switches next year . By outsourcing them, InteliSystems can use its idle facilities to manufacture another product that will contribute $140,000 to operating income, but none of the fixed costs will be avoidable. Should InteliSystems make or buy the switches? Show your analysis based on the information in the table below for making 70,000 switches.

A
В
C
Direct materials
1
2 Direct labor
3 Variable MOH
4 Fixed MOH
5 Total manufacturing cost for 70,000 units
6.
560,000
105,000
70,000
455,000
1,190,000

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