Adams Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost ofproducing 9,300 containers follows.Unit-level materialsUnit-level laborUnit-level overheadProduct-level costs*Allocated facility-level costs$5,9006,2003,500*One-third of these costs can be avoided by purchasing the containers.Russo Container Company has offered to sell comparable containers to Adams for $2.60 each.RequiredX Answer is complete but not entirely correct.$ 19,300Yes$ 24,180 XNo11,10026,900a. Calculate the total relevant cost. Should Adams continue to make the containers?b. Adams could lease the space it currently uses in the manufacturing process. If leasing would produce $11,800 per month, calculatethe total avoidable costs. Should Adams continue to make the containers?a. Total relevant costa. Should Adams continue to make the containers?b. Total avoidable costb. Should Adams continue to make the containers?

The relevant costs are the avoidable costs that can be ignored if the alternative is not chosen. The…

Adams Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials. Unit-level labor. Unit-level overhead. Product-level costs* Allocated facility-level costs. *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Adams for $2.60 each. Required $5,900 6,200 3,500 11,100 26,900 a. Calculate the total relevant cost. Should Adams continue to make the containers? b. Adams could lease the space it currently uses in the manufacturing process. If leasing would produce $11,800 per month, calculate the total avoidable costs. Should Adams continue to make the containers? > Answer is complete but not entirely correct. $ 19,300 Yes $ 24,180 X No a. Total relevant cost a. Should Adams continue to make the ntainers? b. Total avoidable cost b. Should Adams continue to make the containers?

Adams Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials. Unit-level labor. Unit-level overhead. Product-level costs* Allocated facility-level costs. *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Adams for $2.60 each. Required $5,900 6,200 3,500 11,100 26,900 a. Calculate the total relevant cost. Should Adams continue to make the containers? b. Adams could lease the space it currently uses in the manufacturing process. If leasing would produce $11,800 per month, calculate the total avoidable costs. Should Adams continue to make the containers? > Answer is complete but not entirely correct. $ 19,300 Yes $ 24,180 X No a. Total relevant cost a. Should Adams continue to make the ntainers? b. Total avoidable cost b. Should Adams continue to make the containers?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 3CMA: Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each...

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