Kando Company incurs a $10.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $7.00 per unit and sell it for $11.20 per unit. If it does so, unit sales would remain unchanged and $7.00 of the $10.00 per unit costs of Product A would be eliminated. 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.) Make Buy Selling price per unit 2$ 13.50 2$ 11.20 0.00 Cost per unit to make Cost per unit to buy 7.00 Cost per unit not eliminated if bought 3.00 Income per unit 1.20 Company should: Make

Kando Company incurs a $10.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $7.00 per unit and sell it for $11.20 per unit. If it does so, unit sales would remain unchanged and $7.00 of the $10.00 per unit costs of Product A would be eliminated. 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.) Make Buy Selling price per unit 2$ 13.50 2$ 11.20 0.00 Cost per unit to make Cost per unit to buy 7.00 Cost per unit not eliminated if bought 3.00 Income per unit 1.20 Company should: Make

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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Kando Company incurs a $11.00 per unit cost for Product A, which it currently manufactures and sells for $18.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $4.00 per unit and sell it for $16.00 per unit. If it does so, unit sales would remain unchanged and $4.00 of the $11.00 per unit costs of Product A would be eliminated. 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.) Selling price per unit Cost per unit to make Cost per unit to buy Cost per unit not eliminated if bought Income per unit Company should: Make Buy
Keller Company sells product ZR101 for $25 per unit. The cost of one unit of ZR101 is $18. The estimated cost to complete a unit is $4, and the estimated cost to sell is $6. At what amount per unit should product ZR101 be reported, applying lower-of-cost-or-net realizable value?
Sheridan Company sells product 2005WSC for $65 per unit. The cost of one unit of 2005WSC is $62, and the replacement cost is $61. The estimated cost to dispose of a unit is $6, and the normal profit is 40% of selling price. At what amount per unit should product 2005WSC be reported, applying lower-of-cost-or-market? a.) $61. b.) $59. c.) $62. d.) $33.
Required:(a) GEM has an opportunity to sell 10 000 units to an overseas customer. Import duties and other special costs associated with this order would total $42 000. The only selling costs that would be associated with the order would be a shipping cost of $9.00 per unit. What would be the minimum acceptable unit price for GEM to consider this order? (hint: GEM would not accept the order if it would reduce the company’s profit) (b) The company has 200 units of Flicks on hand that were produced two months ago. Due to blemishes on the units, it will be impossible to sell these units at the normal price. If the company wishes to sell them through regular sales channels, what would be the relevant cost for setting the minimum price? Explain. (c) “All future costs are relevant in decision making.” Do you agree? Explain.
Blossom Company sells product 1976NLC for $15 per unit. The cost of one unit of 1976NLC is $17, and the replacement cost is $16. The estimated cost to dispose of a unit is $4, and the normal profit is 20% of selling price. At what amount per unit should product 1976NLC be reported, applying lower-of-cost-or-market? $17. $8. $16. $11.
Shalom Company manufactures Peace Products and sells it at P500 per unit. Variable manufacturing costs to manufacture is P200 per unit, while it incurs P150 per unit to sell. The fixed costs to manufacture and sell are P150,000 and P120,000, respectively. (1) How many units should Shalom Company sell to break-even? (2) If the company targets to earn profit of P300,000, how many units should Company sell?
Product T is produced for $5.90 per pound. Product T can be sold without additionalprocessing for $7.10 per pound, or processed further into Product U at an additionalcost of $0.74 per pound. Product U can be sold for $8.00 per pound. Prepare and show in solution a differential analysis dated August 2 on whether to sell Product T (Alternative 1) or process further into Product U (Alternative 2).
Sunland Company sells product 2005WSC for $70 per unit and uses the LIFO method. The cost of one unit of 2005WSC is $67, and the replacement cost is $66. The estimated cost to dispose of a unit is $6, and the normal profit is 40% of the selling price. At what amount per unit should product 2005 WSC be reported, applying lower - of - cost - or - market? Select answer from the options below $66. $36. $64. $67.
It costs Bonita Industries $11 of variable and $5 of fixed costs to produce one scale which normally sells for $43. A foreign wholesaler offers to purchase 4100 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Bonita has sufficient unused capacity to produce the 4100 scales. If the special order is accepted, what will be the effect on net income? O $12300 increase $12300 decrease O $49200 decrease $61500 increase
Sunland Company sells product 2005WSC for $125 per unit. The cost of one unit of 2005WSC is $122, and the replacement cost is $121. The estimated cost to dispose of a unit is $6, and the normal profit is 40% of selling price. At what amount per unit should product 2005WSC be reported, applying lower-of-cost-or-market? $121. $122. $69. $119.
Company A calculates the cost per unit of its product at $ 28 (with $ 18 variable cost & $ 10 fixed cost). The product sells for $ 42. If then there is a large trader who intends to buy 5000 units but at a price of $ 25 with an additional shipping cost of $ 1, then should Company A accept the order (Assume that the order does not interfere with regular orders)? what is the increase/decrease in net profit of company A? O $125.000 O $140,000 O $95.000 O $30,000
company normally sells its product for $20 per unit. However, the selling price has fallen to $15 per unit. This company's current FIFO inver onsists of 200 units purchased at $16 per unit. Net realizable value has now fallen to $13 per unit. What is the amount of the lower cost of m djustment the company must make as a result of this decline in value? Multiple Choice $1,000. $1,400. $400. $800.