ACT 5140 chpt 21 hw

.docx

School

Nova Southeastern University *

*We aren’t endorsed by this school

Course

5140

Subject

Accounting

Date

Jun 14, 2024

Type

docx

Pages

15

Uploaded by CaptainRaz3331

ACT 5140 chpt 21 hw Brief Exercise 21.4 (Static) Outsourcing a Product (LO21-2, LO21-4, LO21-5) ~ outsourcing cost =$40 per; current cost = $32 per; potential additional income = $9600/year ~@64 installations, outsourcing cost-> (40-32)*64 = $512/month or $6144 a year I think Correct answer
Exercise 21.1 (Static) Accounting Terminology (LO21-1, LO21-2, LO21-3, LO21-4, LO21- 5) Exercise 21.4 (Static) Scarce Resources (LO21-1, LO21-2, LO21-3, LO21-4)
Combination of products shall be: Denim = 6,000 bolts Chenille = 240 bolts Gauze = 1,200 bolts Explanation: As provided the machine hours are limited thus, the constraint is machine hours. Accordingly contribution per machine hour shall be computed. Denim has contribution of $14 for each 0.5 machine hour, thus, contribution per hour Chenille has contribution of  $22 per machine hour Gauze has contribution of $9 per 0.3 hours, thus contribution per machine hour =   = $30 According to contribution per hour, ranking of products shall be Gauze I Denim II Chenille III Therefore, bolts of gauze to be produced = 1,200 that is maximum Hours required = 1,200   0.3 = 360 Hours remaining = 3,600 - 360 = 3,240 Bolts of Denim to be produced = 6,000 that is maximum Hours required = 6,000   0.5 = 3,000 Hours remaining = 3,240 - 3,000 = 240
Bolts of Chenille that can be produced =   = 240 bolts Total contribution in this case = (1,200   $9) + (6,000    $14) + (240    $22) = ($10,800 + $84,000 + $5,280) = $100,080 Exercise 21.6 (Static) Incremental Analysis: Make or Buy Decision (LO21-1, LO21-2, LO21-3, LO21-4)
a) The  incremental analysis  for variable overhead is nil, for fixed overhead is 0, purchase
price is $90,000 and for total cost $15000. b) No, the company should continue manufacturing not buying. a) To determine whether Swank Company should buy the part or continue to manufacture it, we need to compare the total cost of manufacturing with the total cost of buying the part from an outside  supplier . Let's complete the comparative schedule using the information:                                                          Make the Part    Buy the Part                 Incremental Analysis Variable Overhead                           $75,000                    -                             - Fixed  Overhead                               $60,000           $60,000                            0 Purchase Price of part                     $6 per unit       $90,000                         ($90,000) Total cost to acquire part                $135,000          $150,000                        ($15,000) In the comparative schedule, we have filled in the costs for the manufacturing option (Make the Part) and the buying option (Buy the Part). Now, we can calculate the incremental analysis by subtracting the costs of the buying option from the costs of the manufacturing option. Incremental Analysis = Total cost to acquire part (Make the Part) - Total cost to acquire part (Buy the Part) Incremental Analysis = $135,000 - $150,000 Incremental Analysis = -$15,000 The incremental analysis represents the difference in costs between the two options. In this case, the negative value indicates that it would be $15,000 cheaper to continue manufacturing the part rather than buying it from the outside supplier. b) Therefore, based on the incremental analysis, Swank Company should continue to manufacture the part rather than buying it. Learn more about  fixed cost  here:  brainly.com/question/30764172 #SPJ11 Complete question is: "The cost to Swank Company of manufacturing 15,000 units of a particular part is $135,000, of which $60,000 is fixed and $75,000 is variable. The company can buy the part from an outside supplier for $6 per unit. Fixed costs will remain the same regardless of Swank’s
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help