Financial accounting question Circuit Masters, Inc. (CMI), is presently operating at 80% of capacity andmanufacturing 123,000 units of a patented electronic component. Thecost structure of the component is as follows:Raw materials $ 6.30 per unitDirect labor 6.30 per unitVariable overhead 8.30 per unitFixed overhead $ 492,000 per yearAn Italian firm has offered to purchase 20,300 of the components at aprice of $25.5 per unit, FOB CMI'splant. The normal selling price is $32.9 per component. This specialorder will not affect any of CMI's "normal" business. Managementcalculated that the cost per component is $25.5, so it is reluctant toaccept this special order.Required:Calculate the fixed overhead per unit.

Step 1: Define Fixed OverheadFixed manufacturing overhead is the cost that does not change with the…

Answered: Circuit Masters, Inc. (CMI), is…

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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Integrated Masters Inc. (IMI) is presently operating at 80% of capacity and manufacturing 110,000 units of a patented electronic component. The cost structure of the component is as follows: Raw materials Direct labor Variable overhead 7. 20 per unit 7.20 per unit 9.20 per unit $451,000 per year $ Fixed overhead An Italian firm has offered to purchase 21,200 of the components at a price of $30.0 per unit, FOB IMI's plant. The normal selling price is $35.6 per component. This special order will not affect any of IMI's "normal" business. Management calculated that the cost per component is $27.7, so it is reluctant to accept this special order. Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted?
S Circuit Masters Incorporated (CMI) is presently operating at 80% of capacity and manufacturing 110,000 units of a patented electronic component. The cost structure of the component is as follows: Raw materials Direct labor Variable overhead Fixed overhead An Italian firm has offered to purchase 21,200 of the components at a price of $30.00 per unit, FOB CMI's plant. The normal selling price is $35.60 per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is $27.70, so it is reluctant to accept this special order. Required: a. Calculate the fixed overhead per unit. b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? $ 7.20 per unit 7.20 per unit 9.20 per unit $ 451,000 per year Complete this question by entering your answers in the tabs below. Req A Req B and C Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. Fixed overhead per unit
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Abolt Corporation makes 40,000 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 $11.30 direct labour $22.70 variable manufacturing overhead $1.20 fixed manufacturing overhead $24.70 unit product cost $59.90 An outside supplier has offered to sell the company all of these parts it needs for$46.20 a unit. If the company accepts this offer, the facilities now being used tomake the part could be used to make more units of a product that is in highdemand. The additional contribution margin on this other product would be$264,000 per year. Additionally, $21.90 of the fixed manufacturing overheadcost being applied to the part would continue even if the part were purchasedfrom the outside supplier.Required:I. What is the net total dollar advantage (disadvantage) of purchasing the partrather than making it?II. Calculate the maximum amount per unit the company should be willing topay an…
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Please help me. Thankyou.
Damon Industries manufactures 29,000 components per year. The manufacturing costs of the components was determined as follows: Direct materials $ 145,000 Direct labor 169,000 Variable manufacturing overhead 69,000 Fixed manufacturing overhead 89,000 An outside supplier has offered to sell the component for $14. If Damon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $10,900. If Damon purchases the component from the supplier instead of manufacturing it, the effect on operating profits would be a: $81,100 increase. $12,100 decrease. $33,900 increase. $55,100 decrease.

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