A Company makes wheels which it uses in the production of children's wagons. The Company's costs to produce 260,000 wheels annually are as follows: Direct material Direct labor $52,000 78,000 Variable manufacturing overhead 39,000 Fixed manufacturing overhead Total 79,000 $248,000 An outside supplier has offered to sell the company similar wheels for $0.80 per wheel. If the wheels are purchased from the outside supplier, $34,000 of annual fixed manufacturing overhead would be avoided and the facilities now being used to make the wheels would be rented to another company for $93,400 per year. If the company chooses to buy the wheel from the outside supplier, then the change in annual net operating income is a: a. $52,000 increase b. $5,000 decrease c. $70,600 increase d. $88,400 increase
Q: On January 1, 2020, QuickPort Company acquired 90 percent of the outstanding voting stock of…
A: Required B: Worksheet Adjustments (Journal Entries)DateAccountDebit ($)Credit…
Q: I need Solution
A: Explanation of Net Working Capital: Net working capital is the difference between a company's…
Q: General Accounting Question posting
A: To compute Emily's taxable income for 2015 based on the provided information: Taxable Income…
Q: Why is the concept of substance over form particularly relevant in lease accounting? a) It helps…
A: Explanation of Substance Over Form:Substance over form is an accounting principle that prioritizes…
Q: What should investors expect as a return on Elsenore on these accounting question?
A: Step 1: Define Capital Asset Pricing Model (CAPM)The CAPM equation is used to ascertain the rate of…
Q: Compute the following ratios on these accounting question
A: Step 1: Define Price-Earnings RatioThe price-earnings or P/E ratio expresses the relationship…
Q: General Finance
A: Total Return = ((Closing Price-Beginning Price)+Dividend)/Beginning Price Total Return =…
Q: Question 4 Segment Reporting Gold Digger Ltd is a company engaged in upstream and downstream gold…
A: (b) Justification:Materiality: South Africa, Australia, and Tanzania meet at least one of the three…
Q: Financial Accounting
A: To compute the required financial ratios:1. Return on Total Assets (ROA)Formula:ROA = (Net Income +…
Q: Give me two long paragraphs on why technology can affect the quality of audits in the US
A: Technology has a profound impact on the quality of audits in the US. The advent of advanced…
Q: Question/Accounting / solve
A: Explanation of GDP (Gross Domestic Product): GDP is the total monetary value of all finished goods…
Q: Give true answer the accounting question
A: Step 1: Define Degree Of Operating LeverageThe degree of operating leverage is a financial ratio,…
Q: Provide this question general solution accounting
A: Step 1: Define Non-Current AssetsNon-current assets are also known as fixed assets because they are…
Q: Provide this question solution general accounting
A: Step 1: Calculate Avoidable Interest• Formula: Avoidable Interest = Weighted-Average Accumulated…
Q: Please see the Question
A: Prepaid utilities (beginning) = $15,000Less: Utilities expense:Q1…
Q: PipCo financial statements included the following amounts for the current year: Retired preferred…
A: We determine the net cash flows from financing activities by considering the following items from…
Q: Please need help with this general accounting question
A: Step 1: Define Share repurchaseThe repurchase of share is an act of buying own shares by the company…
Q: Step by step Answer
A: Explanation of Times Interest Earned: Times Interest Earned (TIE) is a financial ratio that measures…
Q: I need answer of this question solution general accounting
A: Step 1: Define Ending InventoryEnding inventory refers to the total dollar amount of finished goods…
Q: What was Cal's ROA on these accounting question?
A: Step 1: Define Return on AssetsReturn on assets ratio is a profitability ratio that determines how…
Q: Financial Accounting
A: Step 1: Define Net Profit MarginThe net profit margin is a profitability ratio used to measure the…
Q: Accounting
A: Step 1: Define Work-in-Process InventoryInventory refers to the stock that remains in the warehouse…
Q: A partnership of attorneys in the St. Louis, Missouri, area has the following balance sheet accounts…
A: Journal Entries for Each ScenarioScenario 1: Porthos sells half of his partnership interest to…
Q: Financial
A: Step 1: Total LiabilitiesThe total liabilities are classified into current liabilities and long-term…
Q: Data for bicycle company are as follows: Physical Percent Units Completed Beginning work 10 0% in…
A: In cost accounting, the Equivalent Units of Production (EUP) is a term used to denote the number of…
Q: How many units were completed on these financial accounting question?
A: Step 1: Define Average ReturnThe return that a security or a portfolio of securities has been able…
Q: Question accounting
A: Step 1: Define GoodwillGoodwill is an intangible asset that arises when a company acquires another…
Q: financial account questions
A: To compute the markup percentage using absorption cost pricing, we first need to calculate the total…
Q: Provide this question solution general accounting
A: Step 1: Analyze the ChangesInventory: Increased by $1,100 ($123,500 - $122,400). This means the…
Q: Required: Number of meals
A: To calculate the required number of meals, we can use the break-even/profit analysis formula:…
Q: Financial accounting: find the EBIT
A: Explanation of EBIT (Earnings Before Interest and Tax): EBIT is a measure of company's operating…
Q: Provide Answer of this one please need Correct Answer general accounting
A: we need to calculate the beta of Discovery Cafe and the risk premium in the market.1. Formula for…
Q: Provide this question solution general accounting
A: Step 1: Define Net Cash FlowThe net cash flow for a firm is ascertained by deducting the cash…
Q: The shareholders' equity of ILP Industries includes the items shown below. The board of directors of…
A: All amounts are in millions. ($14,000,000 --> $14) Step 1: Cumulative and Nonparticipating Annual…
Q: I need answer of this question general accounting
A: Step 1: Define CVP AnalysisCost volume profit analysis is a study of different levels of cost and…
Q: ✅Question Successfully posted in Accounting . . . pharmacy co.had the.....
A: Step 1: Define Comprehensive IncomeThe comprehensive income of a company can be determined by adding…
Q: General Accounting Question please answer do fast
A: Step 1: Define Manufacturing CostsThe accounts department will ascertain accounting ledgers that are…
Q: Can you please answer the financial accounting question ?
A: Step 1: Define SalesThe total amount of goods sold is called sales revenue. It is also known as…
Q: Provide Answer
A: a) Sales minus variable costs Correct. The contribution margin is defined as the difference between…
Q: Give true answer this general accounting question
A: Explanation: In the given case, we are required to calculate the total comprehensive income of…
Q: Please give me answer accounting..memes industries uses...
A: Step 1: Define Overhead AllocationIn cost accounting, the overhead, which is the indirect product…
Q: What is the amount of dividends received by the common stockholders in 2010 on these accounting…
A: Step 1:Preference shares holders have right to receive dividend first. In given question it is said…
Q: 7) A company that manufactures metal storage tanks paid $20,000 in cash for the wages of…
A: Step 1:Metal workers who are building the metal storage tanks in the factory are considered as…
Q: Please give me answer.simba company...
A: Step 1: Define Material VarianceThe discrepancy between the actual and predicted costs of direct…
Q: Get correct answer accounting
A: Step 1: Define Statement of Financial PositionThe company's assets, liabilities, and equity are…
Q: Solve these general accounting question do fast
A: Step 1:Break even point is the point where there is no profit or loss situation. Formula of break…
Q: Please give me answer Financial Accounting.......
A: Step 1: Define Rate of ReturnThe rate of return is used to compare investment alternatives. It shows…
Q: Need General Accounting Questions Solution provide the Correct answer what is final Answer
A: Step 1: Calculate the Dividend IncomeAssuming the par value is $100, the dividend is:Dividend =…
Q: I need answer of this question accounting
A: Explanation: In the given case, we are required to calculate the amount of total net assets from the…
Q: Hello tutor provide correct answer the general accounting question
A: This problem uses the Capital Asset Pricing Model (CAPM) formula, which is:E(Ri)=Rf+βi⋅[E(Rm)−Rf]…
Need help with this question accounting
Step by step
Solved in 2 steps
- Rolertyme Company manufactures roller skates. With the exception of the rollers, all parts of the skates are produced internally. Neeta Booth, president of Rolertyme, has decided to make the rollers instead of buying them from external suppliers. The company needs 100,000 sets per year (currently it pays 1.90 per set of rollers). The rollers can be produced using an available area within the plant. However, equipment for production of the rollers would need to be leased (30,000 per year lease payment). Additionally, it would cost 0.50 per machine hour for power, oil, and other operating expenses. The equipment will provide 60,000 machine hours per year. Direct material costs will average 0.75 per set, and direct labor will average 0.25 per set. Since only one type of roller would be produced, no additional demands would be made on the setup activity. Other overhead activities (besides machining and setups), however, would be affected. The companys cost management system provides the following information about the current status of the overhead activities that would be affected. (The supply and demand figures do not include the effect of roller production on these activities.) The lumpy quantity indicates how much capacity must be purchased should any expansion of activity supply be needed. The purchase price is the cost of acquiring the capacity represented by the lumpy quantity. This price also represents the cost of current spending on existing activity supply (for each block of activity). Production of rollers would place the following demands on the overhead activities: Producing the rollers also means that the purchase of outside rollers will cease. Thus, purchase orders associated with the outside acquisition of rollers will drop by 5,000. Similarly, the moves for the handling of incoming orders will decrease by 200. The company has not inspected the rollers purchased from outside suppliers. Required: 1. Classify all resources associated with the production of rollers as flexible resources and committed resources. Label each committed resource as a short- or long-term commitment. How should we describe the cost behavior of these short- and long-term resource commitments? Explain. 2. Calculate the total annual resource spending (for all activities except for setups) that the company will incur after production of the rollers begins. Break this cost into fixed and variable activity costs. In calculating these figures, assume that the company will spend no more than necessary. What is the effect on resource spending caused by production of the rollers? 3. Refer to Requirement 2. For each activity, break down the cost of activity supplied into the cost of activity output and the cost of unused activity.Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided, If Reuben accepts the offer, what will the effect on profit be?James Company makes flanges for its main product of widgets. The cost of making each widget is as follows: Another company has offered to sell to James Company the flanges for a price of $19.00 each. Should James Company buy the flanges from the other company or continue to make the flanges themselves? Show your computations.
- Snow Ride manufactures snowboards. Its cost of making 1,900 bindings is as follows: Direct materials $ 17,590 Direct laabor 3,200 Variable overhead 2,080 Fixed overhead 6,300 Total manufacturing cost for 1,900 bindings $ 29,170 Suppose Livingston will sell bindings to Snow Ride for $13 each. Snow Ride would pay $3 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.50 per binding. Requirments: 1. Snow Ride's accountants predict that purchasing the bindings from livingston will enable the company to avoid $2,100 of fixed overhead. Prepare an analysis to show whether Snow Ride should make or buy the bindings. 2. The facilities freed by purchasing bindings from…What are the fixed overhead costs of making the component?Specter Company makes 20,000 units per year of a part it uses in the products it manufactures.The unit product cost of this part is computed as follows:Direct materials $25.10Direct labour 18.20Variable manufacturing overhead 2.40Fixed manufacturing overhead 13.40Unit product cost $56.70An outside supplier has offered to sell the company all these parts it needs for $56.00 a unit. Ifthe company accepts this offer, the facilities now being used to make the part could be used tomake more units of a product that is in high demand. The additional contribution margin on thisother product would be $50,000 per year.If the part were purchased from the outside supplier, all the direct labour cost of the part wouldbe avoided. However, $5.10 of the fixed manufacturing overhead cost being applied to the partwould continue even if the part were purchased from the outside supplier. This fixedmanufacturing overhead cost would be applied to the company's remaining products.Required:Part a:Calculate…
- Scott Corporation produces a part for use in the production of one of its products. The per-unit costs associated with the annual production of 1,000 units of this part are as follows: Direct Materials $10.50 $24.00 Direct labor Variable factory overhead $5.50 Fixed factory overhead $12.00 Total Costs $52.00 $5,000 of the fixed factory overhead costs associated with the production of this product are common fixed costs. Larson Company has offered to sell 1,000 units of the same part to Scott Corporation for $42 per unit. Scott should: Select one: a. buy the part, because this would save $10.00 per unit. X b. buy the part, because this would save the company $5,000 annually. c. make the part, because this would save the company $5,000 annually. d. make the part, because this would save $2.00 per unit.Snowy Mountain manufactures snowboards. Its cost of making 19,000 bindings is as follows Direct material $22000 Direct Labor $81000 Variable Manufacturing overhead $44000 Fixed Manufacturing overhead $81000 Total manufacturing costs $228000 Cost/per ($228000/19000) $12.00 The data from the table are as follows: Suppose an outside supplier will sell bindings to Snowy Mountain for $15 each. Snowy Mountain would pay $2.00 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost $0.50 of per binding. Requirements 1. Snowy Mountain’s accountants predict that purchasing the bindings from an outside supplier will enable the company to avoid $1,900 of fixed overhead. Prepare an analysis to show whether the company should make or buy the bindings. 2. The facilities freed by purchasing bindings from the outside supplier can be used to manufacture another product that will contribute $3,100 to profit. Total fixed costs will be the same…Juanita Company must decide whether to make or buy some of its components for the appliances it produces. The costs of producing 166,000 electrical cords for its appliances are as follows. Direct materials $90,000 Variable overhead $32,000 Direct labor 20,000 Fixed overhead 24,000 Instead of making the electrical cords at an average cost per unit of $1.00 ($166,000 - 166,000), the company has an opportunity to buy the cords at $0.90 per unit. If the company purchases the cords, all variable costs and one-fourth of the fixed costs will be eliminated. Required a- Prepare an incremental analysis showing whether the company should make or buy the electrical cords b- Will your answer be different if the released productive capacity will generate additional income of $5,000? Managerial Accounting - Ch.7
- Vaughn, Inc. currently manufactures a wicket as its main product. Costs per unit are as follows: Direct materials and direct labor $11 Variable overhead Fixed overhead Total 5 8 $24 Saran Company has contacted Vaughn with an offer to sell it 6400 wickets for $18 each. Of Vaughn's $8 per unit fixed cost. $5 per unit is unavoidable. Should Vaughn make or buy the wickets and why? O Make because the cost savings is $12800 ◇ Buy because the cost savings is $6400 ○ Buy because the cost savings is $19200 ○ Make because the cost savings is $6400Blossom Company must decide whether to make or buy some of its components. The costs of producing 62,600 switches for its generators are as follows. Direct materials $29,800 Direct labor $29,940 Variable overhead Fixed overhead Instead of making the switches at an average cost of $2.90 ($181,540 ÷ 62,600), the company has an opportunity to buy the switches at $2.74 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. (a) Direct materials Direct labor Variable manufacturing costs Fixed manufacturing costs Purchase price Total cost $45,400 $76,400 Prepare an incremental analysis showing whether the company should make or buy the switches. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Senter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount Senter a total amount Make…Gadubhai