a. Prepare a differential analysis report for the make-or-buy decision. Enter your final answer as a positive amount if it represents a net costsavings; enter a negative amount if it represents an increase in cost.COMPANION TECHNOLOGIES COMPANYManufacture Carrying CaseDifferential Analysis ReportPurchase price of carrying caseDifferential cost to manufacture carrying case:Direct materialsDirect laborVariable factory overheadCost increase from manufacturing carrying caseXFeedback▼ Check My Worka. Follow Exhibit 8 in the text. For the make alternative, add the variable and fixed costs. For the buy alternative, add the purchaseprice and the fixed costs. Determine the differential effect on revenues, costs, and income (loss).b. On the basis of the data presented, would it be advisable to make the carrying cases or to continue buying them?It would be advisable to manufacturethe carrying cases because the cost savingsFixed factory overhead is irrelevantsince it will continuewhether the carrying cases are purchased or manufacturedwould be $per unit.jpe1000_F_26583_EDG5...PQGbeg Make-or-Buy DecisionCompanion Technologies Company has been purchasing carrying cases for its portable tablets at a delivered cost of $57 per unit. The company,which is currently operating below full capacity, charges factory overhead to production at the rate of 42% of direct labor cost. The fullyabsorbed unit costs to produce comparable carrying cases are expected to be as follows:Direct materialsDirect labor$24.0021.00Factory overhead (42% of direct labor).Total cost per unit8.82$53.82<If Companion Technologies Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factoryoverhead costs associated with the cases are expected to be 12% of the direct labor costs.a. Prepare a differential analysis report for the make-or-buy decision. Enter your final answer as a positive amount if it represents a net costsavings; enter a negative amount if it represents an increase in cost.COMPANION TECHNOLOGIES COMPANYManufacture Carrying CaseDifferential Analysis ReportPurchase price of carrying caseDifferential cost to manufacture carrying case:D....18.28jpe1000_F_26583_EDG5...PQeg

It is the process of making decisions that involve the management of costs in order to achieve…

Companion Technologies Company has been purchasing carrying cases for its portable tablets at a delivered cost of $57 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 42% of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $24.00 Direct labor 21.00 Factory overhead (42% of direct labor). 8.82 Total cost per unit $53.82

Companion Technologies Company has been purchasing carrying cases for its portable tablets at a delivered cost of $57 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 42% of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $24.00 Direct labor 21.00 Factory overhead (42% of direct labor). 8.82 Total cost per unit $53.82

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter16: Job Order Costing

Section: Chapter Questions

Problem 4CMA: Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and...

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Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
Natur-Gro, Inc., manufactures composters. Based on past experience, Natur-Gro has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 264,000 + 1.42X, where X equals number of composters. Last year, Natur-Gro produced 30,000 composters. Actual overhead costs for the year were as expected. Total overhead for per unit was a. 1.42 b. 8.80 c. 11.63 d. 10.22
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