Gent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 3,900 units were produced: Direct materials $4.00 Direct labor 1.50 Manufacturing overhead 1.20 Total $6.70 Variable manufacturing overhead is applied at $1.00 per unit. The other $0.20 of overhead consists of allocated fixed costs. Gent will need 5,800 units of part A for the next year's production. Cory Corporation has offered to supply 5,800 units of part A at a price of $6.90 per unit. If Gent accepts the offer, all of the variable costs and $780 of the fixed costs will be avoided. A. Calculate the differential cost? Cost to buy Cost to make Differential cost B. Should Gent Designs accept the offer from Cory Corporation? Gent Designs

Gent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4,200 units were produced: Direct materials $4.00 Direct labor 1.50 Manufacturing overhead 1.30 Total $6.80 Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 5,900 units of part A for the next year’s production. Cory Corporation has offered to supply 5,900 units of part A at a price of $7.00 per unit. If Gent accepts the offer, all of the variable costs and $1,260 of the fixed costs will be avoided. A. Calculate the differential cost? Cost to buy $_____ Cost to make _____ Differential cost $_____ B. Should Gent Designs accept the offer from Cory Corporation? Gent Designs ______

Cane Company manufactures two products called Alpha and Beta that sell for $125 and $85, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 101,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 30 21 8 Traceable fixed manufacturing overhead 17 13 16 $ 105 Alpha Beta The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. $12 20 Required: 1. What is the total amount of traceable fixed manufacturing overhead for each of the two products? Beta 19 9 11 $ 77

Dhapa

Cane Company manufactures two products called Alpha and Beta that sell for $175 and $135, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 117,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 40 Beta $ 15 30 30 18 16 26 29 23 19 26 21 $ 163 $ 130 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. oundational 11-13 (Algo) . Assume that Cane's customers would buy a maximum of 91,000 units of Alpha and 71,000 units of Beta. Also assume that the raw aterial available for production is limited to 225,000 pounds. How many units of…

Crystal Pools estimates overhead will utilize 250,000 machine hours and cost $750,000. It takes 2 machine hours per unit, direct material cost of $14 per unit, and direct labor of $20 per unit. What is the cost of each unit produced?

Beto Company pays $6.50 per unit to buy a part for one of the products it manufactures. With excess capacity, the company is considering making the part. Making the part would cost $7.20 per unit for direct materials and $1.00 per unit for direct labor. The company normally applies overhead at the predetermined rate of 200% of direct labor cost. Incremental overhead to make the part would be 80% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Beto make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should Make Buy

Cane Company manufactures two products called Alpha and Beta that sell for $175 and $135, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 117,000 units of each product. Its average cost per unit for each product at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha Beta $ 40 $15 30 18 26 23 26 $ 163 The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 2. What is the company's total amount of common fixed expenses? Total common fixed expenses 30 16 29 19 21 $ 130

Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.80 for direct materials and $1.35 for direct labor. Incremental overhead to make this part is $1.64 per unit. The company can buy the part for $5.06 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy

Gent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 3,900 units were produced: Direct materials $4.00 Direct labor 1.40 Manufacturing overhead 1.30 Total $6.70 Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 5,800 units of part A for the next year’s production. Cory Corporation has offered to supply 5,800 units of part A at a price of $6.90 per unit. If Gent accepts the offer, all of the variable costs and $1,170 of the fixed costs will be avoided. A. Calculate the differential cost? Cost to buy $fill in the blank 1 Cost to make fill in the blank 2 Differential cost $fill in the blank 3 B. Should Gent Designs accept the offer from Cory Corporation?