1011For questions 10-12, refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $60,000. The selling price is Sunit, and the variable cost is $6/unit. 10. To break even; the annual production level for the company needs to be at, a. 10,000 units b. 20,000 units c. 15,000 units d. 6,000 units 11. To make profit of $16,000; theannual production level for the company needs to be at, a. 19,000 units b. 19,500 units c. 20,000 units d. 31,000 units 12. If the company sets annual production at 12,000 units, what must the selling price be tobeak even. Assume annual fixed cost is still $60,000 and unit varable cost is $- unit. a. $15/unit b. $10/unit c. $12/unit d. Sunit For questions 13 - 16, refer to the following problem: A company is considering twooptions for production of a part needed in manufacturing process. Cost information for these two options is as follows: \table[[ALTERNATIVE, FIXED COST, VARIABLE COST], [Special - Purpose Equipment, $250,000 peryear, $10 per unit]. [General - Purpose Equipment,$50,000 per year, $20 per unit]] Using the above information, answer the following questions: 13. What is the break even quantity between the two options? a. 20,000units per year b. 40,000 units per year c. 25,000 units per year d. 50,000 units per year What are the total costs under the Specil Pupuse Rqupunent opion for an annual quantily of 50, 000 units? a. $1,000,000 b.,$750.000 c., $500.000 d. SR50,000 What are the total costs under the Constal Pupow Rumprient pption for an anual quantity of 50,000 mits? Si00,000 b., $450,000 c., $800,000 d., $1.050,000 For what range ofouput is the spetwi Pupustequpment the low cost option? a. more thas 40,000 units per year b. more than 20,000 units per year c. 0 - 20,000 unis per year d. 0 = 40,000 unis per year 14.What are the total costs under the Special-Purpose Equipment option for an annualquantity of 50,000 units?$1.000.000b.$750,000C.15.P$500.000$850.000What are the total costs under the General-Purpose Equipment option for an annualquantity of 50,000 units?$400.000b.$450.000$800,000d.$1,050.00016.For what range of output is the Special-Purpose equipment the low-cost option?more than 40,000 units per yearb.more than 20,000 units per year0-20.000 units per yeard.0-40,000 units per year

Name: 1011For questions 10-12, refer to the following problem: A manufactur
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Description: 1011For questions 10-12, refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $60,000. The selling price is Sunit, and the variable cost is $6/un

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10 For questions 10-12, refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $60,000. The selling price is $ unit, and the variable cost is $6/unit. 10. To break even; the annual production level for the company needs to be at, a. 10,000 units b. 20,000 units c. 15,000 units d. 6,000 units 11. To make profit of $16,000; the annual production level for the company needs to be at, a. 19,000 units b. 19,500 units c. 20,000 units d. 31,000 units 12. If the company sets annual production at 12,000 units, what must the selling price be to beak even. Assume annual fixed cost is still $60,000 and unit varable cost is S unit. a. $15/unit b. $10/unit c. $12/unit d. S₁ unit For questions 13-16, refer to the following problem: A company is considering two

10 For questions 10-12, refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $60,000. The selling price is $ unit, and the variable cost is $6/unit. 10. To break even; the annual production level for the company needs to be at, a. 10,000 units b. 20,000 units c. 15,000 units d. 6,000 units 11. To make profit of $16,000; the annual production level for the company needs to be at, a. 19,000 units b. 19,500 units c. 20,000 units d. 31,000 units 12. If the company sets annual production at 12,000 units, what must the selling price be to beak even. Assume annual fixed cost is still $60,000 and unit varable cost is S unit. a. $15/unit b. $10/unit c. $12/unit d. S₁ unit For questions 13-16, refer to the following problem: A company is considering two

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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1
Provide answer in table format Gelb Company currently manufactures 44,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $77,000 per year, and allocated fixed costs are $61,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 44,000 units and buying 44,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier?
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装 Suppose a BMW executive in Germany is trying to decide whether the company should continue to manufacture an engine component or purchase it from Frankfurt Corporation for $50 each in the next year. Demand for the coming year is expected to be the same as for the current year, 200,000 units. Data for the current year is as follows: Direct material Direct labor Factory overhead, variable Factory overhead, fixed Total costs $5,000,000 $1,900,000 $1,100,000 $3,000,000 $11,000,000 If BMW makes the components, the unit costs of direct material will increase by 10%. If BMW buys the components, 30% of the fixed costs will be avoided. The other 70% will continue regardless of whether the components are manufactured or purchased. Assume that variable overhead varies with output volume.
16. Lamar has the following data: Selling Price $ 40 Variable manufacturing cost $ 22 Fixed manufacturing cost $ 150,000 per month Variable selling & administrative costs $ 6 Fixed selling & administrative costs $ 120,000 per month If Lamar produces and sells 30,000 units, what is the margin of safety in units?
14. IUPI produces and sells scale dinosaur figures. Total variable costs per unit are $ 5.00. Total fixed costs are $ 100,000. The company wants a net income of $ 90,000. Company taxes its income at 40%. If the company sells 50,000 units at what price should it sell.
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Division X makes a part with the following characteristics: Production capacity.. 25,000 units $18 Selling price to outside customers. Variable cost per unit. $11 Fixed cost, total. $100,000 Division Y of the same company would like to purchase 10,000 units each period from Division X. Division Y now purchases the part from an outside supplier at a price of $17 each. Suppose that Division X is operating at capacity and can sell all of its output to outside customers. If Division X sells the parts to Division Y at $17 per unit, the company as a whole will be: Select one: a. better off by $10,000 each period. b. worse off by $20,000 each period. C. worse off by $10,000 each period. d. There will be no change in the status of the company as a whole.
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10 Phelps Industries is a multi-product company that currently manufactures 30,000 units of part ST35 each month for use in production of its products. The facilities now being used to produce part ST35 have a fixed monthly cost of $150,000 and a capacity to produce 35,000 units per month. If Phelps were to buy part ST35 from an outside supplier, the facilities would be idle, but its fixed costs would continue at 40% of their present amount. The variable production costs of Part ST35 are $11 per unit. If Phelps Industries continues to use 30,000 units of part ST35 each month, it would realize a financial advantage by purchasing this part from an outside supplier only if the supplier's unit price is less than: A. $11.00 В. $14.00 С. $13.00 D. $16.00 Е. None of the above