Question 23ABC company is analyzing a make vs. purchase situation for a raw material component used in their several finished good products. Thus,the engineering department has developed the following data to analyze their decision;Alternative A - Purchase 1,000 items per year at a fixed price of $17 per item. The cost of placing the order is negligible according to thepresent cost accounting procedure.Alternative B - Manufacture 1,000 items per year, using available capacity in the factory. Cost estimates are direct materials = $10 peritem and direct labor $3 per item. Manufacturing overhead is $6 per item.Based from this data, the Total Cost of Alternative A is $Blank 1 while the Total Cost of Alternative B is $Blank 2. Therefore, weselect Alternative Blank 3.Note: No need to type the UOM (Unit of Measure).Blank 1Add your answerBlank 2 Add your answerBlank 3 Add your answer

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Answered: ABC company is analyzing a make vs.…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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A federal agency wants to investigate the value workers place on being able to work in quiet factories over noisy factories. It conducts a study and finds the average annual wage in quiet factories to be $55,550 and the average annual wage in noisy factories to be $49,250. (a) How much does the average worker value working in a quiet factory? (b) Suppose the agency could mandate that all factories reduce their noise levels must therefore accept a $6,000 pay decrease. Are these workers helped by the intervention, hurt by the intervention, or indifferent to the intervention?
If a company has excess capacity, it is contemplating whether a special order should be accepted. The order will not impact regular sales. If the company accepts the special order, what will occur? O Both fixed and variable costs will increase. Net income will increase if the special sales price per unit exceeds the unit variable costs. There are no incremental revenues. Incremental costs will not be affected.
A surfboard manufacturer lost $500,000 last year during a recession. Total revenue was $5,000,000 and total variable costs were 40% of sales. The production facility ran at 50% capacity. The production manager wants to know the following: a. What is the percent capacity required to break even? b. When the economy recovers this year, if the plant runs at 100% capacity what net income could the company realize? c. There is a possibility that sales could be so strong this year that the plant may be required to run at 120% capacity by offering a lot of overtime to its production workers. This would result in total variable costs rising by 35%. On a strictly financial basis, should the production manager plan to exceed capacity or should he advise top management to freeze production at 100% capacity? Justify your answer. Answer Solution- 9a. 58.3% 9b. $2,500,000 9c. $3,100,000
I. A producer of felt-tip pens has received a forecast of demand of at least 50,000 pens for the coming month from its marketing department. Fixed costs are $20,000 per month, and variable costs are 25 cents per pen. a. Find the break-even quantity the company must produce if pens sell for $1.50 each. b. Find the quantity to be produced to realize a profit of $20,000. 70
Sandhill Company completes and transfers out 13,720 units and has 1,960 units of ending work in process that are 25% complete as to conversion costs. Materials are entered at the beginning of the process, and there is no beginning work in process. Assuming unit. materials costs of $3 and unit conversion costs of $5 , what are the costs to be assigned to units (a) completed and transferred out and (b) in ending workingrocess?
A local firm is planning its workforce and production levels over the next year. The firm makes a variety of microprocessors and uses sales dollars as its aggregate production unit. Based on orders received and sales forecasts provided by the marketing department, the estimate of dollar sales for the next year by month is as follows: Month Production Days Predicted Demand(in $10,000) Month Production Days Predicted Demand(in $10,000) January 20 595 July 20 410 February 19 225 August 21 130 March 22 565 September 19 405 April 18 205 October 23 315 May 21 230 November 21 355 June 22 120 December 18 350 Inventory holding costs are based on a 25% annual interest charge. It is anticipated that there will be 675 workers on the payroll at the end of the current year and inventories will amount to $120,000. The firm would like to have at least $100,000 of inventory at the end of December…

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