Hawthorn Ltd manufacturers a number of specialised electronic components, including the advanced X1000. Hawthorn Ltd has the capacity to produce 10 000 units of X1000 per year. Currently it is operating at 80 per cent capacity. The selling price for X1000 is $100 per unit. The variable cost per unit is $30. Fixed cost allocated to producing X1000 is $100 000 per year. Hawthorn Ltd receives a special order for 3000 units of X1000. The opportunity cost associated with taking this special order is:

Waterways mass-produces a special connector unit that it normally sells for $3.60. It sells approximately 31,700 of these units each year. The variable costs for each unit are $2.10. A company in Canada that has been unable to produce enough of a similar connector to meet customer demand would like to buy 16,500 of these units at $2.40 per unit. The production of these units is near full capacity at Waterways, so to accept the offer from the Canadian company would require temporarily adding another shift to its production line. To do this would increase variable manufacturing costs by $0.30 per unit. However, variable selling costs would be reduced by $0.20 a unit.An irrigation company has asked for a special order of 2,100 of the connectors. To meet this special order, Waterways would not need an additional shift, and the irrigation company is willing to pay $3.00 per unit.

Platt company has a fixed cost of £200,000 per annum producing external hard disks with aselling price £50 per unit. The variable cost of a hard disk is £40.The production capacity peryear is 25,000 hard disks.a. How many hard disks should Platt sell before it can break even? (Hint: Use ‘Goal seek’ toget this answer).b. Given Platt’s assumption, produce a one-way table to show how quantity sold would affectthe profit and elaborate on the relationship.c. Given Platt’s assumption, produce a two-way table and discuss how a change in salesvolume and variable cost jointly affect profitd. Please include a graph to supplement your explanation for 1b.e. Use the auditing toolbar to show the precedents of your current profit cell.

Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $5.50 per switch. Vista's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Annual fixed costs Variable cost per switch Machine A $632,400 1.78 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 235,000 switches per year and what is the total cost of that alternative? Required 1 Required 2 Required 3 Complete this question by entering your answers in the tabs below. Machine B $ 860,100 0.80 Minimum number of switches For each machine, what is the minimum number of switches that…

Scottish Souvenirs Company has a Sewing Division that does sewing work of various types. The company's Overseas Division has asked the Sewing Division to provide it with 4,000 special silk scarves each year on a continuing basis. The special silk scarf would require £28 per unit in variable production costs. The Overseas Division has a bid from an outside supplier for the special silk scarf at £44.00 per unit. In order to have time and space to produce the new special silk scarf, the Sewing Division would have to cut back production of another scarf - the Classic- which it presently is producing. The Classic scarf sells for £30 per unit, and requires £22 per unit in variable production costs. Boxing and shipping costs of the Classic scarf are £4 per unit. Boxing and shipping costs of £7 per unit (special silk scarf) will also be incurred on internal transfers. The company is now producing and selling 100,000 units of the Classic scarf each year. Production and sales of the Classic…

Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $5.20 per switch. Vista 's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Machine A Machine B Annual fixed costs $ 582, 450 $ 792, 100 Variable cost per switch 1.67 0.75 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 230,000 switches per year and what is the total cost of that alternative?

Leith Tramways Limited has a Castings Division which does casting work of various types. The company's Machine Products Division has asked the Castings Division to provide it with 20,000 special castings each year on a continuing basis. The special casting would require £10 per unit in variable production costs. The Machine Products Division has a bid from an outside supplier for the castings of £29 per unit. In order to have time and space to produce the new casting, the Castings Division would have to cut back production of another casting - the TramMode which it presently is producing. The TramMode sells for £30 per unit, and requires £12 per unit in variable production costs. Boxing and shipping costs of the TramMode are £4 per unit. Boxing and shipping costs for the new special casting would be only £1 per unit. The company is now producing and selling 100,000 units of the TramMode each year. Production and sales of this casting would drop by 20% if the new casting is produced.…

The Mad Hatter Company owns a machine that manufactures two types of chimney caps. Production time is .20 hours for cap A and .40 hours for cap B. The machine's capacity is 2,000 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 1,000 units of cap A and 6,000 units of cap B. Selling prices and variable costs per unit are shown below. Based on this information, what is Mad Hatter's most profitable sales mix? Cap A Cap BSelling price per unit $ 80 $ 60 Variable costs per unit 53 42

Gilberto Company currently manufactures 78,000 units per year of one of its crucial parts. Variable costs are $2.60 per unit, fixed costs related to making this part are $88,000 per year, and allocated fixed costs are $75,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.80 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 78,000 and buying 78,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier?

Lightning Semiconductors produces 100,000 hi – tech computer chips per month. Each chip uses a component that Lightning makes in - house. The variable costs to make the component are $1.40 per unit, and the fixed costs are $1,300,000 per month. The company has been approached by a foreign producer who can supply the component, within acceptable quality standards, for $1.20 each. The fixed costs are unavoidable, and Lightning would have no other use for the facilities currently employed in making the component. What would be the effect on operating income if the company decides to outsource? O A. Lightning Semiconductors could save $1,300,000 per month in costs. B. There would be no effect on operating income. O c. Lightning Semiconductor's costs would increase by $120,000 per month. O D. Lightning Semiconductors could save $20,000 per month in costs.