Direct materials. . $ 5.00 Direct labor... 8.00 Overhead ... 9.00 Total cost per unit. $22.00 Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the 50,000 units of RX5 for $18.00 per unit. Required 1. Determine the total incremental cost of making 50,000 units of RX5. 2. Determine the total incremental cost of buying 50,000 units of RX5. 3. Should the company make or buy RX5?

Direct materials. . $ 5.00 Direct labor... 8.00 Overhead ... 9.00 Total cost per unit. $22.00 Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the 50,000 units of RX5 for $18.00 per unit. Required 1. Determine the total incremental cost of making 50,000 units of RX5. 2. Determine the total incremental cost of buying 50,000 units of RX5. 3. Should the company make or buy RX5?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Lazer Tag manufactures computer parts within a relevant range of 50,000 to 100,000 units per year. Complete the following manufacturing cost schedule (a through j) for Lazer Tag. Fill in the following chart. Parts Produced 50,000 100,000 TOTAL COSTS: Variable $75,000 ? Fixed 50,000 ? Total ? ? COSTS PER UNIT: Variable ? ? Fixed ? ? Total ? ?
RLW-II Enterprises estimated that indirect manufacturing costs for the year would be $75 million and that 15,000 machine-hours would be used. (a) Compute the predetermined indirect cost application rate using machine hours as the burden vehicle. (b) Determine the total cost of production for a product with direct material costs of $2 million, direct-labor costs of $2.5 million, and 200 machine-hours.
Please help me. Thankyou.
Whiteside Corporation manufactures a variety of appliances which all use Part B89. Currently, Whiteside Corporation manufactures Part B89 itself. It has been producing 11,000 units of Part B89 annually. The annual costs of producing Part B89 at the level of 11,000 units include: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost Answers: $3.30 $8.50 All of the fixed manufacturing overhead costs would continue whether Part B89 is made internally or purchased from an outside supplier. Assume the company can purchase 11,000 units of the part from the Nadal Parts Company for $20.10 each, and the facilities currently used to make the part could be used to manufacture 11,000 units of another product that would have a $9 per unit contribution margin. If no additional fixed costs would be incurred, what should Whiteside Corporation do? Selected Answer: Make the new product and buy the part to earn an extra $8.30 per unit contribution to…
Storch Corporation takes eight hours to complete the setup process for a certain electrical component, with the setup cost averaging $150 per hour. If the company's competitor can accomplish the same process in six hours, Stanley's non-value-added cost would be: so. $150. $300. S900. $1,200.
Diamond Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $84 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 50% of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $56 Direct labor 20 Factory overhead (50% of direct labor) 10 Total cost per unit $86 If Diamond Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 10% of the direct labor costs. Required: A. Prepare a differential analysis, dated February 24 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text…
Two companies Malcom and Yoda manufacture the similar hand-sanitizing products. The following data for the two companies for the year 2019 are provided below: Malcom ($) Yoda ($) Sales revenue 60,000 72000 Total costs 42,000 48000 Variable Costs 40 % of sales revenue 50% Required: If sales of the product in Yoda company are equal to 3,000 units, determine the BEP (in units), and present the Break-even chart. In 2019, company Yoda plans to increase the variable cost by $1 while the fixed cost and the selling price will remain constant. Calculate the number of units to be sold in order to earn the same profit as Malcom in 2019. Based on your answers to parts 1 and 2, Discuss which company has a safer financial position, and why. I need the answers of the the remaining subparts too all these three points
Nisse AB manufactures insulating materials of different thicknesses in the same production facility. The company manufactures three different product variants (PV) in thicknesses of 10 mm, 20 mm and 30 mm. For the coming years, the following production is planned:PV Thickness Quantity1 10 mm 15 0002 20 mm 30 0003 30 mm 15 000The total manufacturing cost is estimated at SEK 3,000,000.Calculate the cost of the different product variants using an equivalent calculation
The table below shows information on the material cost, demand and production hours for parts in a cylinder head machining plant. Five parts are to be considered for an automated FMS for the plant. The parts were initially sourced from a vendor at a purchase prices given in the table below. Because of the proposed 2 shifts, the shop will be available 440 hours / month and charged at R1000 / hour. Part type Description 1 4 5 1. Purchase price (R) / unit 6000 2500 8000 2000 3000 2. Material cost (R) 600 500 100 800 900 3. Demand / month 80 70 60 50 30 4. Hours / unit 3 4. 5. Savings / unit 6. Hours / month, p 7. Savings / hour 8. Savings / month, s 9. si / pi Compute the missing values for savings/unit, Hours / month, Savings /hour, Savings / month and answer the following: 1. Savings / unit for part type 1 2. Savings / unit for part type 2 3. Savings / unit for part type 3 4. Savings / unit for part type 4 5. Savings / unit for part type 5 6. s1 / p1 7. s2 / p2 2.
A company produces two produces two products (product A&B) and is currently planning its production mix for the next operating period. The maximum demand of product A is 2,000 units whiles that of product B is also 2,000 units however, the total raw materials required for producing both products is only 60,000kg. The estimated cost, sales and production data of the two products are given below: PRODUCT (A) PRODUCT (B) GHC GHC 140.00 Direct material:@GHØ10per kg Direct labor:@GHC30per hour 90.00 Fixed Overhead 20.00 20.00 Variable overhead:@GHØ40 per hour 80.00 120.00 Total cost per unit 400.00 370.00 Add profit 50.00 30.00 Selling price per unit 450.00 400.00 Assuming you are the management accountant of this company, advice management on the most profitable mix. 240.00 60.00 1
2..
Each year, Basu Company produces 24,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.17. The unit cost is: Direct materials $0.72 Direct labor 0.25 Variable overhead 0.13 Fixed overhead 2.95 Total unit cost $4.05 Required: 1. What are the alternatives for Basu Company? 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. List the relevant cost(s) of external purchase. 3. Which alternative is more cost effective and by how much? _____ by $___ 4. What if $18,560 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? ____ by $____