Haver Company currently pays an outside supplier $35 per unit for a part for one of its products. Haver is considering two alternative methods of making the part. Method 1 for making the part would require direct materials of $15 per unit, direct labor of $18 per unit, and incremental overhead of $3 per unit. Method 2 for making the part would require direct materials of $15 per unit, direct labor of $12 per unit, and incremental overhead of $7 per unit. Required: 1. Compute the cost per unit for each alternative method of making the part. 2. Should Haver make or buy the part? If Haver makes the part, which production method should it use? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should Haver make or buy the part? If Haver makes the part, which production method should it use? Should Haver make or buy the part? If Haver makes the part, which production method should it use? < Required 1 Required 2 >

Haver Company currently pays an outside supplier $35 per unit for a part for one of its products. Haver is considering two alternative methods of making the part. Method 1 for making the part would require direct materials of $15 per unit, direct labor of $18 per unit, and incremental overhead of $3 per unit. Method 2 for making the part would require direct materials of $15 per unit, direct labor of $12 per unit, and incremental overhead of $7 per unit. Required: 1. Compute the cost per unit for each alternative method of making the part. 2. Should Haver make or buy the part? If Haver makes the part, which production method should it use? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should Haver make or buy the part? If Haver makes the part, which production method should it use? Should Haver make or buy the part? If Haver makes the part, which production method should it use? < Required 1 Required 2 >

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the parts for its engines, including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $30 per unit. To evaluate this offer, Troy Engines, Limited, summarized the cost of producing the carburetor internally as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost Per Unit $ 12 8 2 9* Required 1 Required 2 Required 3 Required 4 12 $43 *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 1. If the company has no alternative use for the facilities being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 12,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted?…
Anobateh enterprise is trying to figure out what materials they are going to make or buy to their chosen supplier. The chosen supplier offers the following price for the materials. Material 1 is cost Php5, material 2 is cost Php8 and material 3 is cost Php5. The production department set the quantity of Materials 1 and 3 to 15,000 units while Material 2 is 12,400. The total cost of Material 1 is 80,000, Product B is 100,000 and Product C is 90,000. The non-relevant costs for Material 1 is 15,000, Material 2 has 25% non-relevant costs from the total costs and Material 3 is 5,000. Other information: Material 1 Material 2 Material 3 Labor hours / unit 0.15 0.20 0.25 1. How many units of each component should be outsourced and insourced? 2. If only 4,700 labor hours are available, how many units of each component should be produced internally or outsourced? FILL IN THE BLANKS FOR THE FINAL ANSWER Make sure to encode properly with comma (Example 19,469). If the answer is zero, just encode 0…
Lakeside Incorporated produces a product that currently sells for $46.80 per unit. Current production costs per unit include direct materials, $13; direct labor, $15; varlable overhead, $6.50; and fixed overhead, $6.50. Product engineering has determined that a certain part of the product conversion process could be outsourced. Raw material costs would not be affected, but direct labor and variable overhead costs would be reduced by 30%. No other opportunity is currently feasible for unused production capacity. Required: a. What would be the net cost advantage or disadvantage if Lakeview decided to outsource part of the conversion process at a cost of $5.20 per unit? Note: Do not round your Intermediate calculations. Round your final answer to 2 decimal places. b. Should Lakeside outsource part of the conversion process at a cost of $5.20 per unit? a. b. Should Lakeside outsource conversion process at this cost?
Denger
Use the information provided to calculate standard costs: To make one switch it takes 20 feet of plastic-coated copper wire and 0.3 pounds of plastic material. The plastic material can usually be purchased for $15 per pound, and the wire costs $2.99 per foot. The labor necessary to assemble a switch consists of two types. The first type of labor is assembly, which takes 3.4 hours. These workers are paid $28 per hour. The second type of labor is fınishing, which takes 2.4 hours. These workers are paid $26 per hour. Overhead is applied using labor hours. The variable overhead rate is $14.35 per labor hour. The fixed overhead rate is $15.42 per hour. What is the total standard cost for manufacturing overhead? Round to the nearest penny, two decimal places.
The make or buy decision Lakeview Engine Inc. produces engines for the watercraft industry. An outside manufacturer has offered to supply several component parts used in the engine assemblies, which are currently being produced by Lakeview. The supplier will charge Lakeview $270 per engine for the set of parts. Lakeview's current costs for those part sets are direct materials, $160; direct labor, $80; and manufacturing overhead applied at 100% of direct labor. Variable manufacturing overhead is considered to be 20% of the total, and fixed overhead will not change if the part sets are acquired from the outside supplier. bd 1200 Required: Should Lakeview Engine continue to make the part sets or accept the offer to purchase them for $270? Ovin
Haver Company currently pays an outside supplier $33 per unit for a part for one of its products. Haver is considering two alternative methods of making the part. Method 1 for making the part would require direct materials of $14 per unit, direct labor of $17 per unit, and incremental overhead of $3 per unit. Method 2 for making the part would require direct materials of $14 per unit, direct labor of $11 per unit, and incremental overhead of $7 per unit. Required: 1. Compute the cost per unit for each alternative method of making the part. 2. Should Haver make or buy the part? If Haver makes the part, which production method should it use? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the cost per unit for each alternative method of making the part. Cost per unit Make with Method 1 Make with Method 2 Cost per unit $ 0 Required 1 $ 0 $ Buy Required 2 >
Tri-bikes manufactures two different levels of bicycles: the Standard and the Extreme. The total overhead of $300,000 has traditionally been allocated by direct labor hours, with 150,000 hours for the Standard and 50,000 hours for the Extreme. After analyzing and assigning costs to two cost pools, it was determined that machine hours is estimated to have $200,000 of overhead, with 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product. It was also estimated that the setup cost pool would have $100,000 of overhead, with 1,000 hours for the Standard and 1,500 hours for the Extreme. Required: Calculate the amount of overhead assigned per product, under traditional and under ABC costing.
Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the parts for its engines, including the carburetors. An outside supplier offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $30 per unit. To evaluate this offer, Troy Engines, Limited, summarized the cost of producing the carburetor internally as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost Per 19,000 Units Unit Per Year $ 12 $ 228,000 10 3 190,000 57,000 3* 6 57,000 114,000 $ 34 $ 646,000 "One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 1. If the company has no alternative use for the facilities being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 19,000 carburetors from the outside supplier? 2. Should the outside…
Fogerty Company makes two products-titanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Hubs Sprockets Additional information about the company follows: a. Hubs require $36 in direct materials per unit, and Sprockets require $10. b. The direct labor wage rate is $13 per hour. c. Hubs require special equipment and are more complex to manufacture than Sprockets. d. The ABC system has the following activity cost pools: 0.80 0.40 Annual Production 20,000 units 50,000 units Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Required 1 Required 2 Required: 1. Compute the activity rate for each activity cost pool. 2. Determine the unit product cost of each product according to the ABC system. Complete this question by entering your answers in the tabs below. Compute the activity rate for each activity cost pool. Activity Cost Pool Machine setups Special…
Appraise the motivation of senior management (CEO and/or CFO) to commit financial statement fraud and how they go about to do so? Elaborate.
Tri-Bikes manufactures two different levels of bicycles - the Standard and the Extreme. The total overhead of $300,000 has traditionally been allocated by direct labor hours, with 150,000 hours for the Standard and 50,000 hours for the Extreme. After analyzing and assigning costs to two cost pools, it was determined that machine hours is estimated to have $180,000 of overhead, with 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product. It was also estimated that the setup cost pool would have $120,000 of overhead, with 1,000 hours for the Standard and 1,500 hours for the Extreme. PLEASE NOTE: Predetermined overhead rates will be rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). The rates will include their proper label according to the textbook examples (no abbreviations). All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). What is the overhead cost per product,…