Required: 1. What are the alternatives for Basu Company? 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. List the relevant cost(s) of external purchase. 3. Which alternative is more cost effective and by how much?
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Question Content Area
Make-or-Buy Decision, Alternatives, Relevant Costs
Each year, Basu Company produces 24,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.29. The unit cost is:
Direct materials $0.86 Direct labor 0.28 Variable overhead 0.09 Fixed overhead 2.65 Total unit cost $3.88 Required:
1. What are the alternatives for Basu Company?
2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production.
List the relevant cost(s) of external purchase.
3. Which alternative is more cost effective and by how much?
by $fill in the blank 54. What if $19,560 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much?
by $fill in the blank 7
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- Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 18,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.34. The unit cost is: Direct materials $0.78 Direct labor 0.32 Variable overhead 0.14 Fixed overhead 2.90 Total unit cost $4.14 Required: 3. Which alternative is more cost effective and by how much? by $fill in the blank 5 4. What if $18,440 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? by $fill in the blank 7Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 22,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.26. The unit cost is: Direct materials $0.77 Direct labor 0.29 Variable overhead 0.09 Fixed overhead 2.10 Total unit cost $3.25 Required: 1. What are the alternatives for Basu Company? 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. List the relevant cost(s) of external purchase. 3. Which alternative is more cost effective and by how much? ____ by 4. What if $19,240 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? ____ byMake-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 14,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.42. The unit cost is: Direct materials $0.87 Direct labor 0.31 Variable overhead 0.12 Fixed overhead 2.55 Total unit cost $3.85 Required: 1. What if $19,320 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? Buying the part from the external supplier by $fill in the blank
- Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 14,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.42. The unit cost is: Direct materials $0.87 Direct labor 0.31 Variable overhead 0.12 Fixed overhead 2.55 Total unit cost $3.85 4. What if $19,320 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much?Buying the part from the external supplier by $fill in the blankMake-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 14,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.42. The unit cost is: Direct materials $0.87 Direct labor 0.31 Variable overhead 0.12 Fixed overhead 2.55 Total unit cost $3.85 3. Which alternative is more cost effective and by how much? Making the part in house by $fill in the blank 4. What if $19,320 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? Buying the part from the external supplier by $fill in the blankActivity Cost Driver Chosen asAllocation Base Conversion Cost Per Unit ofAllocation Base Materials handling Number of parts $1.00 Machining Machine hours 60.00 Packaging Number of finished units 2.00 Each windsock requires three parts and spends five minutes in the machining department. The total cost of direct materials and direct labor is $3.50 per windsock. Gale produces 20,000 windsocks each year and sells them at 140% of cost. The total cost of producing the 20,000 windsocks is: Question 7 options: $160,000. $230,000. $270,000. $1,260,000.
- Activity Cost Driver Chosen asAllocation Base Conversion Cost Per Unit ofAllocation Base Materials handling Number of parts $1.00 Machining Machine hours 60.00 Packaging Number of finished units 2.00 Each windsock requires three parts and spends five minutes in the machining department. The total cost of direct materials and direct labor is $3.50 per windsock. Gale produces 20,000 windsocks each year and sells them at 140% of cost. The selling price per windsock is: Question 8 options: $13.50. $18.90. $16.10. $88.20.Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 18,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.34. The unit cost is: Direct materials $0.78 Direct labor 0.32 Variable overhead 0.14 Fixed overhead 2.90 Total unit cost $4.14 Required: 1. What are the alternatives for Basu Company? 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. List the relevant cost(s) of external purchase.View Policies Current Attempt in Progress At Sunland Company, there are 910 units of ending work in process that are 100% complete as to materials and 40% complete as to conversion costs. If the unit cost of materials is $3 and the total costs assigned to the 910 units is $6,734, what is the per unit conversion cost? (Round answer to 2, decimal places, es. 2.25.) Per unit conversion cost $ eTextbookand Media Attempts: 0 of 2 used
- RequIred Informotion (The following information applies to the questions displayed below] Cane Company manufactures two products called Alpha and Beta that sell for $225 and $175, respectively. Each produc uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 130,000 units of each product. Its average cost per unit for each product at this level of activity are given below. Alpha $42 42 $24 32 Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses 34 29. $173 Total cost per unit The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses. are unavoidable and have been allocated to products based on sales dollars. 10. Assume that Cane expects to produce and sell 74,000 Alphas during the current year. A supplier has offered to manufacture a deliver 74,00O Alphas to Cane for a price of…Which of the following would be an acceptable measure of activity for a material handling activity cost pool? Multiple Choice о No Number of material moves Yes Multiple Choice No Yes $28.21 per machine-hour $31.75 per machine-hour Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 46,000 machine-hours. The estimated variable manufacturing overhead was $4.54 per machine-hour and the estimated total fixed manufacturing overhead was $1,297,660. The predetermined overhead rate for the recently completed year was closest to: $4.54 per machine-hour Yes $32.75 per machine-hour Weight of material moved Yes No NoQuestion Content Area Make-or-Buy Decision Pizana Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $61 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 43% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Line Item Description Amount Direct materials $25.00 Direct labor 19.00 Factory overhead (43% of direct labor) 8.17 Total cost per unit $52.17 If Pizana 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 12% of the direct labor costs. Question Content Area a. Prepare a differential analysis dated May 31 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. Round your answers to two decimal places. If an…