FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- nkt.3arrow_forwardIntercontinental’s special order also requires 1,000 kilograms of genatope, a solid chemical regularly used in the company’s products. The current stock of genatope is 8,000 kilograms at a book value of 8.10 p per kilogram. If the special order is accepted, the firm will be forced to restock genatope earlier than expected, at a predicted cost of 8.70 p per kilogram. Without the special order, the purchasing manager predicts that the price will be 8.30 p when normal restocking takes place. Any order of genatope must be in the amount of 5,000 kilograms. Required:1. What is the relevant cost of genatope?2. Discuss each of the figures in the exercise in terms of its relevance to the decision.arrow_forwardSaved Help Save Required information [The following information applies to the questions displayed below.] Intercontinental's special order requires 1,400 kilograms of genatope, a solid chemical regularly used in the company's products. The current stock of genatope is 9,600 kilograms at a book value of 8.40 p per kilogram. If the special order is accepted, the firm will be forced to restock genatope earlier than expected, at a predicted cost of 9.00 p per kilogram. Without the special order, the purchasing manager predicts that the price will be 8.60 p when normal restocking takes place. Any order of genatope must be in the amount of 5,000 kilograms. Required: 1. What is the relevant cost of genatope? (Enter your answer in pesos.) Total relevant cost 3 4arrow_forward
- Sunland Biotech enters into a licensing agreement with Novak Pharmaceutical for a drug under development. Sunland will receive a payment of $12,500,000 if the drug receives regulatory approval. Based on prior experience in the drug- approval process, Sunland determines it is 80% likely that the drug will gain approval and a 20% chance of denial. (a) Determine the transaction price of the arrangement for Sunland Biotech. Transaction price $arrow_forwardPlease provide answer in text (Without image)arrow_forward8,please answer the following question, thanksarrow_forward
- Hopner Products enters into a contract with Tulles to sell three different products. The total transaction price is $400,000. Each of the products is a separate performance obligation. Based on the information presented in the table, what is the allocated transaction price of product Z using the adjusted market assessment approach? (Round intermediary percentages to the nearest hundredth percent, and round your final answer to the nearest whole number. Product Standalone Price Market Price X ) $140,000 $120, 000 Y $ 100,000 $210, 000 Z Not Available $90,000arrow_forward18) Hopner Products enters into a contract with Tulles to sell three different products. The total transaction price is $350,000. Each of the products is a separate performance obligation. Based on the information presented in the table, what is the allocated transaction price of product Z using the adjusted market assessment approach? (Round intermediary percentages to the nearest hundredth percent, and round your final answer to the nearest whole number.) Product X Y Z A) $104,055 B) $116,286 C) $116,667 D) $90,000 Standalone Price Market Price $130,000 $110,000 $120,000 $150,000 Not Available $110,000arrow_forwardOne of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 200,000 parts in year 1; 300,000 in year 2; and 500,000 in year 3. Shipping and handling of parts from the supplier’s factory is estimated at $0.01 per unit. Additional inventory handling charges should amount to $0.005 per unit. Finally,administrative costs are estimated at $20 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $10,000. Direct materials can be purchased for $0.05 per unit. Direct labor is estimated at $0.03 per unit plus a 50 percent surcharge for benefits; indirect labor is estimated at $0.011 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be allocated if the parts are made in-house…arrow_forward
- Please do not give solution in image format ? And Fast Answering Please And Explain Proper Step by Step.arrow_forwardE7-7 (Algo) Analyzing Make-or-Buy Decision [LO 7-2, 7-4] MSI is considering outsourcing the production of the handheld control module used with some of its products. The company has received a bid from Monte Legend Company (MLC) to produce 10,000 units of the module per year for $16.00 each. The following information pertains to MSI's production of the control modules: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per unit $ 9 3 3 7 $ 22 MSI has determined it could eliminate all variable costs if the control modules were produced externally, but none of the fixed overhead is avoidable. At this time, MSI has no specific use in mind for the space that is currently dedicated to the control module production. Required: 1. Compute the difference in cost between making and buying the control module. 2. Should MSI buy the modules from MLC or continue to make them? 3-a. Suppose the MSI space currently used for the modules could be…arrow_forward....... Decision on Accepting Additional Business Miramar Tire and Rubber Company has capacity to produce 196,000 tires. Miramar presently produces and sells 150,000 tires for the North American market at a price of $95.00 per tire. Miramar is evaluating a special order from a South American automobile company, Rio Motors. Rio Motors is offering to buy 23,000 tires for $75.75 per tire. Miramar's accounting system indicates that the total cost per tire is as follows: Direct materials Direct labor Factory overhead (60% variable) $36 13 22 Selling and administrative expenses (30% variable) 19 $90 < Total Miramar pays a sales commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $5.00 per tire. In addition, Rio has made the order…arrow_forward
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