Coronado Industries incurred the following costs to produce 100000 units: Variable costs $690000 Fixed costs 860000 An outside supplier is interested in producing the item for Coronado. If the item is produced outside, Coronado could use the released production facilities to make another item that would generate $160000 of net income. At what unit price would Coronado accept the outside supplier's offer if Coronado wanted to increase net income by $130000? O $6.60 $8.50 $7.20 $9.80

Coronado Industries incurred the following costs to produce 100000 units: Variable costs $690000 Fixed costs 860000 An outside supplier is interested in producing the item for Coronado. If the item is produced outside, Coronado could use the released production facilities to make another item that would generate $160000 of net income. At what unit price would Coronado accept the outside supplier's offer if Coronado wanted to increase net income by $130000? O $6.60 $8.50 $7.20 $9.80

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A5
29
6. Plumbing Company makes 4,000 units per year of a part called an axial tap for use in one of its products. Data concerning the unit production costs of the axial tap follow: Direct materials Direct labor £35 10 8 20 Variable manufacturing overhead ... Fixed manufacturing overhead Total manufacturing cost per unit... £73 An outside supplier has offered to sell Plumbing Company all of the axial taps it requires. If Plumbing Company decided to discontinue making the axial taps, 40% of the above fixed manufacturing overhead costs could be avoided. Assume that direct labor is a variable cost. Required: a. Assume Plumbing Company has no alternative use for the facilities presently devoted to production of the axial taps. If the outside supplier offers to sell the axial taps for £65 each, should Plumbing Company accept the offer? Fully support your answer with appropriate calculations. b. Assume that Plumbing Company could use the facilities presently devoted to production of the axial taps…
25
52. MC.18-058 Scoresby Co. uses 6 machine hours and 2 direct labor hours to produce Product X. It uses 8 machine hours and 16 direct labor hours to produce Product Y. Scoresby's Assembly and Finishing departments have factory overhead rates of $240 per machine hour and $160 per direct labor hour, respectively. How much overhead cost will be charged to the two products? a.Product X = $1,760; Product Y = $4,480 b.Product X = $1,440; Product Y = $2,560 c.Product X = $3,200; Product Y = $9,600 d.Product X = $800; Product Y = $800
Crane Company produces 5000 units of part A12E. The following costs were incurred at that level of production: Direct materials Direct labor Variable overhead Fixed overhead $51000 150000 O $(39000). O $(98000). O $74000. O $129000. 76000 187000 If Crane buys the part from an outside supplier, $59000 of the fixed overhead is avoidable. If the outside supplier offers a unit price of $75, net income will increase (decrease) by
bh.5
40 Mark 2.00 out of 200 Flag question Company XYZ produced 1,000 units of product A. The total manufacturing costs were $30,000. The Manufacturing overhead cost was twice the direct labor cost while the direct labor cost. What was the direct materials cost per uni
At 50,000 units of production, the Grayson Company expects costs to be as follows: Direct materials $140,000 $100,000 $50,000 $40,000 Direct labour Depreciation of factory Depreciation of production equipment Production supervisor's salary Supplies Indirect labour Electricity Assume all cost items are either strictly fixed or strictly variable. The total cost of direct materials at 40,000 units of production would be: Select one: a. $116,000 b. $168,000 $ 24,000 $5,000 $ 30,000 $ 15,000 c. $112,000 d. $140,000