Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top-selling cereal at a price of $22,000 for 20,000 pounds. The costs shown are associated with the production of 20,000 pounds of almond cereal:**Almond Treats Cost Data:**| Costs | Amounts ||--------------------------|-----------|| Direct material | $13,000 || Direct labor | $5,000 || Manufacturing overhead | $7,000 |The manufacturing overhead consists of $2,000 of variable costs with the balance being allocated to fixed costs. If Almond Treats buys the cereal, what is the effect on profit? If the effect is negative, use a dash (not parentheses) ().

Note: In the decision-making question of buying or making the goods, the firstly relevant cost for…

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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Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $57 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 46% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $24 Direct labor 16 Factory overhead (46% of direct labor) 7.36 Total cost per unit $47.36 If Fremont Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 13% of the direct labor costs. Question Content Area a. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If required, round your answers to two decimal places. If an amount is zero, enter "0". Use a minus sign to indicate a…
Cane Company manufactures two products called Alpha and Beta that sell for $140 and $100, respectively. Each product uses only one type of raw material that costs $8 per pound. The company has the capacity to annually produce 106,000 units of each product. Its average cost per unit for each product at this level of activity is given below:
Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,000 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: Direct material $13,000 Direct labor 5,000 7,000 Manufacturing overhead Total $25,000 The manufacturing overhead consists of $2,000 of variable costs with the balance being allocated to fixed costs. PLEASE NOTE: Costs per unit are rounded to two decimal places and shown with "$" and commas as needed (i.e. $1,234.56). All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). 1. What is Almond Treats' relevant cost? 2. What does Acme's offer cost? 3. If Almond Treats accepts the offer, what will the effect on profit be? o Incremental dollar amount = . Increase or Decrease? Please note: Your answer is either "Increase" or "Decrease" - capital…
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?
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Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $22,000 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: Direct material $13,100 Direct labor 5,000 Manufacturing overhead 6,900 Total $25,000 The manufacturing overhead consists of $2,200 of variable costs with the balance being allocated to fixed costs. A. Calculate the differential cost of Acme? B. Should Almond Treats make or buy the almond cereal? Make v Feedback
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a) Almond Delites manufactures various types of biscuits. FMF Biscuits Ltd has approached Almond Delites with a proposal to sell the company its top-selling biscuit at a price of $22 000 for 20 000 units. The costs shown are associated with the production of 20 000 units of almond biscuits: Direct materials: $12,000 Direct labor: $5,000 Variable overhead: $8,000 Fixed overhead: $25,000 The manufacturing overhead consists of $2 000 of variable costs, with the balance being allocated to fixed costs. Assume that 40% of the fixed costs would be avoidable if the almond biscuits were purchased externally rather than produced internally. Required: i)Should Almond Delites make or buy the almond biscuit? ii) What qualitative factors should Almond Delites consider before making its decision?
Almond Treats manufactures various types of cereals that feature almonds. Acme Cereal Company has approached Almond Treats with a proposal to sell the company its top selling cereal at a price of $21,800 for 20,000 pounds. The costs shown are associated with production of 20,000 pounds of almond cereal: Direct material $13,000 Direct labor 5,100 Manufacturing overhead 7,100 Total $25,200 The manufacturing overhead consists of $2,200 of variable costs with the balance being allocated to fixed costs. A. Calculate the differential cost of Acme? $fill in the blank 1 B. Should Almond Treats make or buy the almond cereal? Make or buy?

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