A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could use either of 2 processes. One would ntail a VC of $17 per unit & annual FC of $180k; the other would entail a VC of $15 per unit & annual FC of $230k. Two vendors are willing to provide the part. Vendor A as a price of $30 per unit for any volume up to 50k units. Vendor B has a price of $32 per unit for demand of 5k units or less & $28 per unit for larger quantities. ) If selling price per unit is $45 what is the breakeven point. If the manager anticipates an annual volume of 10k units, which alternative would be best from a cost standpoint? Which Alternative would entail the highest profit?

Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $14. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the full-cost plus assuming 15% transfer price? Variable cost per unit $7.16 Fixed cost per unit 1.14 Division B sales price of Component X 14.5

Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $21.15 per pound and costs $16.40 per pound to produce. Product D would sell for $42.80 per pound and would require an additional cost of $9.55 per pound to produce. The differential cost of producing Product D is Oa. $9.55 per pound Ob. $5.73 per pound Oc. $7.64 per pound Od. $11.46 per pound

Answer the following questions. 1. Dalton Computers makes 5,500 units of a circuit board, CB76 at a cost of $250 each. Variable cost per unit is $170 and fixed cost per unit is $80. Peach Electronics offers to supply 5,500 units of CB76 for $230. If Dalton buys from Peach it will be able to save $15 per unit in fixed costs but continue to incur the remaining $65 per unit. Should Dalton accept Peach's offer? Explain. 2. TX Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: (Click the icon to view the information.) TX Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should TX Manufacturing replace the old machine? Explain. Relevant COSIS. Variable costs per unit Avoidable fixed costs per unit Purchase price per unit Unit relevant cost Cash operating costs Current disposal value of old machine Cost of new machine $ Total relevant costs 170 15 $ 185 $ 230 230 Dalton Computers should…

Charleston Affair currently makes the King Component, incurring variable costs of $18 per unit and fixed costs of $4 per unit. The company has the option to purchase the component for $20 per unit. Prepare a differential analysis to determine if the company should make (Alternative 1) or buy (Alternative 2) the King Component. Assume that the fixed costs will be incurred in each situation up to 40,000 units.    Determine at what want point of sales does it make sense to produce rather than buy)

Marigold Corp. is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $27 and Marigold would sell it for $60. The cost to assemble the product is estimated at $13 per unit and the company believes the market would support a price of $64 on the assembled unit. What decision should Marigold make and why? Sell before assembly because the company will be better off by $9 per unit. Sell before assembly because the company will be better off by $4 per unit. Process further because the company will be better off by $18 per unit. Process further because the company will be better off by $20 per unit.

Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following: (FV of $1, PV of $1, FVA of S1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Machine À could be purchased for $27,000. It will last 10 years with annual maintenance costs of $900 per year. After 10 years the machine can be sold for $2,835. Machine 8 could be purchased for $22,500. It also will last 10 years and will require maintenance costs of $3,600 in year three, $4,500 in year six, and $5,400 in year eight. After 10 years, the machine will have no salvage value. Required: Assume an interest rate of 8% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year. Ignore income tax considerations. Calculate the present value of Machine A & Machine B. Which machine Esquire…

Cobe Company has manufactured 230 partially finished cabinets at a cost of $57,500. These can be sold as is for $69,000. Instead, the cabinets can be stained and fitted with hardware to make finished cabinets. Further processing costs would be $13,800, and the finished cabinets could be sold for $92,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should the cabinets be sold as is or processed further and then sold? (a) Sell or Process Analysis Revenue Costs Income Incremental income (loss) to process further (b) The company should: Sell As Is Process Further