Mainstay Auto uses a standard part in the manufacture of several of its trucks. The cost of producing 40,000 parts is $120,000, which includes fixed costs of $60,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $3.00 per unit, and avoid 30% of the fixed costs. Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for $12,000 profit. If Mainstay Auto makes the part, what will its operating income be?   Select one: a. $150,000 greater than if the company bought the part b. $30,000 greater than if the company bought the part c. $30,000 less than if the company bought the part d. $54,000 greater than if the company bought the part e. $54,000 less than if the company bought the part

Bridgeport Racers makes bicycles. It has always purchased its bicycle tires from the Cullumber Tires at $26 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: Direct materials   $9   Direct labor   $5   Variable manufacturing overhead   $8   The company’s fixed expenses would increase by $73,000 per year if managers decided to make the tire.(a1) Calculate total relevant cost to make or buy if the company needs 11,300 tires a year.   Make Buy Total relevant cost $enter a dollar amount  $enter a dollar amount  (a2) Ignoring qualitative factors, if the company needs 11,300 tires a year, should it continue to purchase them from Balyo or begin to produce them internally? The company select an option                                                           should not continueshould continue to purchase the tires.

Tamarisk Manufacturing incurs unit costs of $7.20 ($5.20 variable and $2.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 17,200 of the parts for $5.70 per unit. If it accepts the offer, Tamarisk will save all variable costs and $1.00 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Tamarisk will realize by buying the part. (Round per unit answers to 2 decimal places, eg. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).)

Diamond Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $84 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 50% of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows:     Direct materials $56 Direct labor 20 Factory overhead (50% of direct labor) 10 Total cost per unit $86   If Diamond Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 10% of the direct labor costs.   Required: A. Prepare a differential analysis, dated February 24 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text…

Dineshkaka

Stan Fawcett's company currently purchases a gear assembly from Salt Lake Supply, Inc., at $3.80 per unit with a minimum order of 3,000 units. Stan is considering instead producing the gear assembly himself. He estimates that producing it himself will cost $12,000 to set up the process and then $1.82 per unit for labor and materials. a) Using the line drawing tool, add the total cost graph for Stan to produce the assembly instead of purchasing from Salt Lake Supply. Total cost for the purchase option is already plotted. Properly label your line. Note: Carefully follow the instructions above and only draw the required object. Cost 40,000- ¡Minimum Order 36,000 32,000- 28,000- 24,000 20,000- 16,000 12,000 - 8,000- 4,000- 0+ 0 2,000 4,000 Quantity 6,000 8,000

Voltaic Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 36,000 parts is $ 100,000, which includes fixed costs of $ 40,000 and variable costs of $ 60,000. The company can buy the part from an outside supplier for $2 per unit and avoid 20% of the fixed costs. Assume that the company can use the freed manufacturing space to make another product that can earn a profit of $ 15,000. If Voltaic outsources, what will be the effect on operating income?A. decrease of $11,000B. increase of $ 11,000C. increase of $ 15,000D . decrease of $ 8,000

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…

Ancinas Company produces printers and uses a standard part in the manufacture of several of its printers. The cost of producing 43,000 parts is $280,000, which includes fixed costs of $136,000 and variable costs of $144,000. The company can buy the part from an outside supplier for $5.00 per unit, and avoid 30% of the fixed costs. If Ancinas Company makes the part, how much will its operating income be?     $30,200 less than if the company bought the part.     $30,200 greater than if the company bought the part.     $65,000 greater than if the company bought the part.     $65,000 less than if the company bought the part.

A company makes 36,000 motors to be used in the production of its blender. The average cost per motor at this level of activity is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead An outside supplier recently began producing a comparable motor that could be used in the blender. The price offered to the company for this motor is $23.95. There would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be: Multiple Choice O O O ($68,400) $214,200 $9.50 $ 8.50 $ 3.45 $ 4.40 90,000 $158,400