FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question

please help me  provide complete and correct answer with all working   please answer correct please remember answer should be complete and correct with working 

 

Carver Company manufactures a component used in the production of one of its main products. The following cost information is available:
Direct materials
Direct labor (variable)
Variable manufacturing overhead
Fixed manufacturing overhead
$420
110
OA. Operating income would decrease by $70,000.
B. Operating income would increase by $20,000.
OC. Operating income would increase by $90,000.
OD. Operating income would decrease by $20,000.
90
30
A supplier has offered to sell the component to Carver for $650 per unit. If Carver buys the component from the supplier, the released facilities can
be used to manufacture a product that would generate a contribution margin of $20,000 annually. Assuming that Carver needs 3,000 components
annually and that the fixed manufacturing overhead is unavoidable, what would be the impact on operating income if Carver outsources?
expand button
Transcribed Image Text:Carver Company manufactures a component used in the production of one of its main products. The following cost information is available: Direct materials Direct labor (variable) Variable manufacturing overhead Fixed manufacturing overhead $420 110 OA. Operating income would decrease by $70,000. B. Operating income would increase by $20,000. OC. Operating income would increase by $90,000. OD. Operating income would decrease by $20,000. 90 30 A supplier has offered to sell the component to Carver for $650 per unit. If Carver buys the component from the supplier, the released facilities can be used to manufacture a product that would generate a contribution margin of $20,000 annually. Assuming that Carver needs 3,000 components annually and that the fixed manufacturing overhead is unavoidable, what would be the impact on operating income if Carver outsources?
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education