Almond Treats manufactures various types of cereals thatfeature almonds. Acme Cereal Company has approachedAlmond Treats with a proposal to sell the company its topselling cereal at a price of $22,000 for 20,000 pounds. Thecosts shown are associated with production of 20,000pounds of almond cereal:Almond Treats cost dataCostsDirect materialDirect laborManufacturing overheadAmounts$13,0005,0007,000The manufacturing overhead consists of $2,000 of variablecosts with the balance being allocated to fixed costs. ShouldAlmont Treats make or buy the almond cereal?[Select]

The company may have to take a make-or-buy decision. The company evaluates on the basis of cost and…

Answered: Almond Treats manufactures various…

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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Maxim manufactures a hamster food product called Green Health. Maxim currently has 18,500 bags of Green Health on hand. The variable production costs per bag are $3.50 and total fixed costs are $27,000. The hamster food can be sold as it is for $10.00 per bag or be processed further into Premium Green and Green Deluxe at an additional cost. The additional processing will yield 18,500 bags of Premium Green and 4,700 bags of Green Deluxe, which can be sold for $9 and $7 per bag, respectively. The incremental revenue of processing Green Health further into Premium Green and Green Deluxe would be: Multiple Choice O $199,400. $14,400. $194,400. $5,000. $9,400.
Reuben's Deli currently makes rolls for deli sandwiches it produces. It uses 33,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: Materials $0.23 per roll Labor 0.40 per roll Variable overhead 0.15 per roll Fixed overhead 0.20 per roll A potential supplier has offered to sell Reuben the rolls for $0.88 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? Reuben would see a $ in profit if he buys the rolls.
Voltaic Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 36,000 parts is $ 100,000, which includes fixed costs of $ 40,000 and variable costs of $ 60,000. The company can buy the part from an outside supplier for $2 per unit and avoid 20% of the fixed costs. Assume that the company can use the freed manufacturing space to make another product that can earn a profit of $ 15,000. If Voltaic outsources, what will be the effect on operating income?A. decrease of $11,000B. increase of $ 11,000C. increase of $ 15,000D . decrease of $ 8,000
Reuben's Dell currently makes rolls for dell sandwiches it produces. It uses 33,000 rolls annually in the production of dell sandwiches. The costs to make the rolls are: Materials $0.24 per roll 0.39 per roll 0.16 per roll 0.20 per roll Labor Variable overhead Fixed overhead A potential supplier has offered to sell Reuben the rolls for $0.89 each. If the rolls are purchased, 30% of the fixed overhead could be avoided. If Reuben accepts the offer, what will the effect Reuben would see a s In profit if he buys the rolls. profit be?
Reuben's 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: Costs Reuben's Deli cost data Amounts Materials Labor Variable overhead Fixed overhead Increments $0.24 per roll 0.40 per roll 0.16 per roll 0.20 per roll 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?
Value Electronics uses a standard part in the manufacture of different types of radios. The total cost of producing 32,000 parts is $90,000, which includes fixed costs of $30,000 and variable costs of $60,000. The company can buy this part from an external supplier for $5 per unit and avoid 10% of the fixed costs. If Value Electronics decides to outsource the production of the part, how will it impact its operating income? A. Operating income increases by $97,000. B. Operating income decreases by $100,000. C. Operating income decreases by $97,000. D. Operating income increases by $100,000.
Reuben's Deli currently makes rolls for deli sandwiches it produces. It uses 31,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: Materials $0.24 per roll Labor 0.39 per roll Variable overhead 0.16 per roll Fixed overhead 0.20 per roll A potential supplier has offered to sell Reuben the rolls for $0.89 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? decline in profit if he buys the rolls. Reuben would see a $
Glassworks makes products for the sandblasting industry. One of the products they make is bags of high-grade sandblasting media that is made from a combination of quartz-sand and recycled ground-glass (cullet). Standard costs and quantities to produce one bag of sandblasting media are as follows: Quantity Cost Quartz-sand 20 kg $4.00 Cullet 5 kg $3.00 80,000 bags of sandblasting media were produced. Actual purchases and inventories were: Beginning Ending Purchases Purchases Inventory Inventory (in kg) ( in $) Quartz-sand 0 kg 0 kg 1,610,000 kg $322,161 Cullet 0 kg 120,000 kg 550,000 kg $286,000 Required: Calculate the following variances: a)Total direct material efficiency variance. b)Total direct material mix variance.…
Washington Company has two divisions, Jefferson and Adams. Jefferson produces an item that Adams could use in its production. Adams currently is purchasing 100,000 units from an outside supplier for $78.40 per unit. Jefferson is currently operating at full capacity of 900,000 units and has variable costs of $46.40 per unit. The full cost to manufacture the unit is $59.20. Jefferson currently sells 900,000 units at a selling price of $86.40 per unit. Required: 1. What will be the effect on Washington Company's operating profit if the transfer is made internally? 2. What will be the change in profits for Jefferson if the transfer price is $67.20 per unit? 3. What will be the change in profits for Adams if the transfer price is $67.20 per unit?

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