6. The Lantern Corporation has 1,000 obsolete lanterns that are carried in inventory at a manufacturing cost of P20,000, If the lanterns are re-machined for P5,000, they could be sold for P9,000. If the lanterns are scrapped, they could be sold for P1,000. What alternative is more desirable and what are the total relevant costs for the alternative? a. Re-machine and PS,000. b. Re-machine and P25,000. c. Scrap and P20,000. d. Neither, as there is an overall loss under either alternatives.

6. The Lantern Corporation has 1,000 obsolete lanterns that are carried in inventory at a manufacturing cost of P20,000, If the lanterns are re-machined for P5,000, they could be sold for P9,000. If the lanterns are scrapped, they could be sold for P1,000. What alternative is more desirable and what are the total relevant costs for the alternative? a. Re-machine and PS,000. b. Re-machine and P25,000. c. Scrap and P20,000. d. Neither, as there is an overall loss under either alternatives.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

More Parts Liquidators specializes in buying excess parts inventories to resell or to incorporate into other products. They recently purchased parts for $135,000 and they have a buyer willing to pay $162,000. The company also can incorporate these parts into a new product at a cost of $101,250 and sell the new product for $256,500. What should More Parts Liquidators do? Sales Revenue Cost of Parts Additional Costs Profit/ loss More Parts should Parts Only New Product withparts Incremental
Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.15. The machine will increase fixed costs by $16,500 per year. The information they will use to consider these changes is shown here. A. What will the impact be on the break-even point if Flanders purchases the new machinery? Round per unit cost answers to two decimal places. Current New Machine Units Sold 221,000 fill in the blank 1 Sales Price Per Unit $2.10 $fill in the blank 2 Variable Cost Per Unit $1.75 $fill in the blank 3 Contribution Margin Per Unit $0.35 $fill in the blank 4 Fixed Costs $45,500 $fill in the blank 5 Break-Even (in units) 130,000 fill in the blank 6 Break-Even (in dollars) $273,000 $fill in the blank 7 B. What will the impact be on net operating income if Flanders purchases the new machinery? Current New Machine Sales $464,100 $fill in the blank 8 Variable Costs 386,750 fill in the blank 9 Contribution Margin…
Please give answer the question
Ski Boards, Inc., wants to enter the market quickly with a new finish on its ski boards. It has three choices: (a) refurbish the old equipment at a cost of $250, (b) make major modifications at the cost of $1,000, or (c) purchase new equipment at a net cost of $1,750. If the firm chooses to refurbish the equipment, materials and labor will be $1.20 per board. If it chooses to make modifications, materials and labor will be $0.75 per board. If it buys new equipment, variable costs are estimated to be $0.40 per board. a) On the graph to the right, use the line drawing tool to draw the total cost curve for each option. Label the curves TC2, TC b, and TCC, respectively. Note: Carefully follow the instructions above and only draw the required objects. Dollars 8,000- 7,500- 7,000- 6,500- 6,000- 5,500- 5,000- 4,500- 4,000 3,500 3,000- 2,500- 2,000- 1,500- 1,000- 500- 0- 0 1,000 2,000 3,000 4,000 5,000 Boards ☑
Luxury Motors has 7,400 defective autos on hand, which cost $13,616,000 to manufacture, Luxury can either sell these defective autos as scrap for $8,400 per auto, or spend an additional $18,720,000 on repairs and then sell them for $12,400 per unit. What is the net advantage to repair the autos compared to selling them for scrap? Multiple Choice $62,160,000 $10,880,000 $91,760,000 $18,720,000
H1.
Concord Music produces 59600 blank CDs on which to record music. The CDs have the following costs: Direct Materials $10000 Direct Labour 15700 Variable Overhead 3300 Fixed Overhead 6600 None of Concord’s fixed overhead costs can be reduced, but another product could be made that would increase the operating income by $4500 if the CDs were acquired externally. If cost minimization is the major consideration and the company would prefer to buy the CDs, what is the maximum external price that Concord would be willing to accept to acquire the 59600 units externally? $31100 $40100 $35600 $33500
A business has recently purchased a tonne of PVC material at a cost of £350. The material could be sold immediately for £320 or it could be used as a substitute for another type of material that costs £310 per tonne. The PVC material is in continuous use within the business and its replacement cost is £360 per tonne. What is the relevant cost of the material? O a. £360 O b. £350 O c. £310 O d. £630 O e. £320
More Parts Liquidators specializes in buying excess parts inventories for resale or to incorporate into other products. They recently purchased parts for $125,000 and they have a buyer willing to pay $150,000. The company can also incorporate these parts into a new product at a cost of $93,750 and sell the new product for $237,500. What should More Parts Liquidators do?
Se.119.
Need help
Cox Electric makes electronic components and has estimated the following for a new design of one of Its products. Fixed Cost = $15,000 Material Cost per Unit = $0.19 Labor Cost per Unit = $0.14 MY NOTES ASK YOUR TEACHI Revenue per Unit = $0.69 Note that fixed cost is incurred regardless of the amount produced. Per-unit material and labor cost together make up the variable cost per unit. Assuming that Cox Electric sells all that it produce profit is calculated by subtracting the fixed cost and total variable cost from total revenue. If Cox Electric makes 43,100 units of the new product, what is the resulting profit (In whole dollars)? $