21-34 JIT purchasing, relevant benefits, relevant costs. (CMA, adapted) The Kate Steel Corporation is an automotive supplier that uses automatic turning machines to manufacture precision parts from steel bars Kate Steel's inventory of raw steel averages $400,000. Keith Abbott, president of Kate Steel, and Shaun Silvio, Kate Steel's controller, are concerned about the costs of carrying inventory. The steel supplier is willing to supply steel in smaller lots at no additional charge. Silvio identifies the following effects of adopting a JIT Inventory program to virtually eliminate steel inventory: ■ Without scheduling any overdme, lost sales due to stockouts would increase by 25,000 units per year. How- ever by Incurring overtime premiums of $30,000 per year, the increase in lost sales could be reduced to 15,000 units per year. This would be the maximum amount of overdime that would be feasible for Kate Steel. Two warehouses currently used for steel bar storage would no longer be needed. KateSteel rents one warehouse from another company under a cancelable leasing arrangement at an annual cost of $80,000. The other warehouse is owned by KateSteel and contains 16,000 square feet. Three-fourths of the space in the owned warehouse could be rented for $3.00 per square foot per year. Insurance and property tax costs totaling $10,000 per year would be eliminated. Kate Steers required rate of return on investment is 15% per year. KateSteel's budgeted Income statement for the year ending December 31, 2020, (In thousands) is: Revenues (1,000,000 units) Cost of goods sold Variable costs $15,000 $6,380 Fixed costs 2,820 Total costs of goods sold 9,200 Gross margin 5,800 Marketing and distribution costs Variable costs $2,010 Fixed costs 750 2,780 Operating Income $ 3,040 Total marketing and distribution costs 1. Calculate the estimated dollar savings (loss) for the KateSteel Corporation that would result in 2020 from the adoption of JIT purchasing. 2. Identity and explain other factors that KateSteel should consider before deciding whether to adopt JIT purchasing.

DIFFERENTIAL ANALYSIS AND DECISION MAKING                                                                                                                          Heavy Metals produces various electronics items for use in heavy machines. The company usually produces all the necessary parts for its products. However, an outside supplier has recently offered to sell a specialized part – Part H – to the company for $31 per unit. To evaluate this offer, the company has gathered the following information regarding its own cost of producing the Part H internally:     Per unit 15,000 units per year Direct materials 12 180,000 Direct Labour 12 180,000 Variable manufacturing overhead 3 45,000 Fixed manufacturing overhead (one-third belongs to supervisory salaries; two-thirds belongs to the depreciation of special equipment) 6 90,000     Required (show your calculation):   i) Assuming that the company has no alternative use for the facilities now…

Please do not give solution in image format thanku

i Required Informatlon The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each produ. uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product Its average cost per unit for each product at this level of activity are given below. Alpha $ 42 42 Beta $24 32 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead. Variable selling expenses Common fixed expenses 26. 34 24 27. 29. $173 34 Total cost per unit The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 6. Assume that Cane normally produces and sells 109,000 Betas per year. What is the financial advantage (disadvantage) of discontinuing the Beta product…

Please do not give solution in image format thanku

Please do not give solution in image format thanku

Don't give answer in image format

Please do not give solution in image format thanku

Kuat Drive Inc. manufactures machine parts for Star Destroyer engines. CEO Adhi Mundy is considering an offer from a subcontractor to provide 2,000 units of product R2D2 for $120,000. If Kuat Drive does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs:   Cost per unit ($) Direct Materials 28 Direct Labor 18 Variable Overhead 16 Allocated Fixed Overhead 4 Questions: What is the relevant cost to make the product internally? What is the estimated increase or decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier? Which alternative is more attractive to Kuat Drive Inc, make or buy the machine parts? What strategic considerations likely bear on this make vs buy decision? (at least 2 considerations)

Please do not give solution in image format thanku