Suppose Fine Cuisine restaurant is considering whether to​ (1) bake bread for its restaurant​ in-house or​ (2) buy the bread from a local bakery. The chef estimates that variable costs of making each loaf include $0.48 of​ ingredients, $0.26 of variable overhead​ (electricity to run the​ oven), and $0.77 of direct labor for kneading and forming the loaves. Allocating fixed overhead​ (depreciation on the kitchen equipment and​ building) based on direct​ labor, Fine Cuisine assigns $0.96 of fixed overhead per loaf. None of the fixed costs are avoidable. The local bakery would charge $1.78 per loaf. 1. What is the full product unit cost of making the bread​ in-house? 2. Should Fine Cuisine bake the bread​ in-house or buy from the local​ bakery? Why? 3. In addition to the financial​ analysis, what else should Fine Cuisine consider when making this​ decision?     Requirements 1. What is the unit cost of making the bread​ in-house?   Complete the following outsourcing decision analysis to determine Fine Cuisine​'s unit cost of making the bread.     Requirements 1. What is the unit cost of making the bread​ in-house?   Complete the following outsourcing decision analysis to determine Fine Cuisine​'s unit cost of making the bread.    Fine Cuisine Outsourcing Decision   Direct material   Direct labor   Variable overhead   Variable cost per unit   Plus: Fixed overhead per unit   Cost per unit     Requirement 2. Should Bourbon House bake the bread​ in-house or buy from the local​ bakery? Why?   Requirement 3. In addition to the financial​ analysis, what else should Bourbon House consider when making this​ decision?

Barbara, the manager of Metlock, is analyzing the company's MOH costs from last year. Metlock had always followed an actual costing system when determining the costs of its customizable telescopes. Barbara wondered if it would be better to switch to a normal costing system, as she had heard a number of people talking about that at an industry conference she attended the previous month. Since Metlock has a highly machine-intensive operation, machine hours are used as its MOH cost driver. Here are the costs and other MOH information Barbara is analyzing: Budgeted MOH cost Actual MOH cost Budgeted machine hours Actual machine hours $426,240 Actual MOH rate $ 419,040 Determine the actual MOH rate and the budgeted MOH rate Metlock would have used last year under actual costing and normal costing, respectively. (Round answers to 2 decimal places, e.g. 52.75.) Budgeted MOH rate $ 96,000 108,000 /machine hour /machine hour

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Danielle Hastings was recently hired as a cost analyst by CareNet Medical Supplies Inc. One of Danielle’s first assignments was to perform a net present value analysis for a new warehouse. Danielle performed the analysis and calculated a present value index of 0.75. The plant manager, Jerrod Moore, is very intent on purchasing the warehouse because be believes that more storage space is needed. Jerrod asks Danielle into his office and the following conversation takes place: Jerrod: Danielle, you’re new here, aren’t you? Danielle: Yes, I am. Jerrod: Well, Danielle, I’m not at all pleased with capital investment analysis that you performed on this new warehouse. I need that warehouse for my production. If I don’t get it, where am I going to place out output? Danielle: Well, we need to get product into our customer’s hands. Jerrod: I agree, and we need a warehouse to do that. Danielle: My analysis does not support constructing a new warehouse. The numbers don’t lie; the warehouse does not…