Homework Answers
Fixed costs are sunk costs, which would be incurred, irrespective of the make or but decision, and is thus irrelevant for this situation.
Variable costs are directly related to the cost of production, and are relevant costs for decision making. (Direct material, Direct labor and variable MOH)
Relevant cost to make = Direct labor + Direct Material + Variable MOH
Relevant cost to make = $2 + $5 + ($20x 40%) = $15
Add Answer to:
III THOMPSON RIVERS UNIVERSITY The following standard costs pertain to a component part manufactured by Ashby...
The following standard costs pertain to a component part manufactured by Ashby Company: Direct Materials $2...
The following standard costs pertain to a component part manufactured by Ashby Company: Direct Materials $2 Direct Labour $5 Manufacturing Overhead $20 Standard Cost per Unit $27 The company can purchase the part from an outside supplier for $25 per unit. The manufacturing overhead is 60% fixed, and this fixed portion would not be affected by this decision. Assume that direct labour is an avoidable cost in this decision. What would be the relevant amount of the standard cost per...
Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 13,000 units of a component used...
Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 13,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.31. The unit cost is: Direct materials $0.89 Direct labor 0.27 Variable overhead 0.07 Fixed overhead 2.10 Total unit cost $3.33 Required: 1. What are the alternatives for Basu Company? Make the part in house or buy the part externally 2. Assume that none of the fixed cost is avoidable. List...
Question 1: (8 marks) (B1, C1) Ahlia Company manufactured 6,000 units of a component part that...
Question 1: (8 marks) (B1, C1) Ahlia Company manufactured 6,000 units of a component part that is used in its product and incurred the following costs Direct materials $35,000 Direct labor15,000 Variable manufacturing overhead 10,000 Fixed manufacturing overhead 20,000 $80,000 Another company has offered to sell the same component part to the company for $13 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the...
7. Make-or-buy decision. Standard costs and other data for two component parts used by Griffon El...
7. Make-or-buy decision. Standard costs and other data for two component parts used by Griffon Electronics are presented below: PART A4 PART B5 8.00 4.70 2.00 $14.70 1.00 4.00 Factory overhead. 8,000 2 $15 Machine hours per unit. Unit cost if purchased. $5 In past years, Griffon Electronics has manufactured all of its required components; however, in the current year only 30,000 hours of otherwise idle machine time can be devoted to component production. Accordingly, some of the parts must...
Grand Limited currently produces a component of a product with the following per unit production costs:...
Grand Limited currently produces a component of a product with the following per unit production costs: Direct materials $19 Direct labour 33 Overhead 18 Total production costs $70 Grand Ltd. currently manufactures these components in-house, averaging production of 29227 units each year. A supplier has approached the company offering to supply 29227 units each year at a cost of $50 each. 60% of the overhead is fixed and if Grand Ltd. purchases the components, then 1/3 of the fixed overhead...
Supler Corporation produces a part used In the manufacture of one of its products. The unit...
Supler Corporation produces a part used In the manufacture of one of its products. The unit product cost is $22, computed as follows: al. Variable nanufacturirg overhead 1 Fixed nanufacturing overhead tUnit product cost 22 An outside supplier has offered to provide the annual requirement of 7,000 of the parts for only $16 each. The company estimates that 50 % of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume...
Royal Company manufactures 10,000 units of Part R-3 each year. At this level of activity, the...
Royal Company manufactures 10,000 units of Part R-3 each year.
At this level of activity, the cost per unit for Part R-3
follows:
Direct materials
$14.40
Direct labour
21.00
Variable manufacturing overhead
9.60
Fixed manufacturing overhead
25.00
Total cost per part
$70.00
An outside supplier has offered to sell 10,000 units of Part R-3
each year to Royal Company for $54 per part. If Royal Company
accepts this offer, the facilities now being used to manufacture
Part R-3 could be...
Grand Limited currently produces a component of a product with the following per unit production costs:...
Grand Limited currently produces a component of a product with the following per unit production costs: Direct materials $20.56 Direct labour 32.68 Overhead 18.53 Total production costs $71.77 Grand Ltd. currently manufactures these components in-house, averaging production of 30668 units each year. A supplier has approach the company offering to supply 30668 units each year at a cost of $52.51 each. 60% of the overhead is fixed and if Grand Ltd. purchases the components, then 1/3 of the fixed overhead...
Teich Inc. is considering whether to continue to make a component or to buy it from...
Teich Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 13,300 of the components each year. The unit product cost of the component according to the company's absorption cost accounting system is given as follows Direct maternals Direct labor Varlable manufacturing overhead FIxed manufacturing overhead Unit product cost $910 6.10 1.90 3.90 $21.00 Assume that direct labor is a variable cost. Of the fixed manufacturing overhead. 30% is...
Company makes 40,000 units per year of a part that it uses in the products it...
Company makes 40,000 units per year of a part that it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 11.30 Direct labour $ 22.70 Variable manufacturing overhead $ 1.20 Fixed manufacturing overhead $ 24.70 Unit product cost $ 59.90 An outside supplier has offered to sell the company all the parts that Company needs for $46.20 a unit. If the company accepts this offer, the facilities now being...
Question 1: (8 marks) (B1, C1) Ahlia Company manufactured 6,000 units of a component part that is used in its product and incurred the following costs Direct materials $35,000 Direct labor15,000 Variable manufacturing overhead 10,000 Fixed manufacturing overhead 20,000 $80,000 Another company has offered to sell the same component part to the company for $13 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the...
7. Make-or-buy decision. Standard costs and other data for two component parts used by Griffon Electronics are presented below: PART A4 PART B5 8.00 4.70 2.00 $14.70 1.00 4.00 Factory overhead. 8,000 2 $15 Machine hours per unit. Unit cost if purchased. $5 In past years, Griffon Electronics has manufactured all of its required components; however, in the current year only 30,000 hours of otherwise idle machine time can be devoted to component production. Accordingly, some of the parts must...
Supler Corporation produces a part used In the manufacture of one of its products. The unit product cost is $22, computed as follows: al. Variable nanufacturirg overhead 1 Fixed nanufacturing overhead tUnit product cost 22 An outside supplier has offered to provide the annual requirement of 7,000 of the parts for only $16 each. The company estimates that 50 % of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume...
Royal Company manufactures 10,000 units of Part R-3 each year.
At this level of activity, the cost per unit for Part R-3
follows:
Direct materials
$14.40
Direct labour
21.00
Variable manufacturing overhead
9.60
Fixed manufacturing overhead
25.00
Total cost per part
$70.00
An outside supplier has offered to sell 10,000 units of Part R-3
each year to Royal Company for $54 per part. If Royal Company
accepts this offer, the facilities now being used to manufacture
Part R-3 could be...
Teich Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 13,300 of the components each year. The unit product cost of the component according to the company's absorption cost accounting system is given as follows Direct maternals Direct labor Varlable manufacturing overhead FIxed manufacturing overhead Unit product cost $910 6.10 1.90 3.90 $21.00 Assume that direct labor is a variable cost. Of the fixed manufacturing overhead. 30% is...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago