Davis Company currently buys a component part for $8.00 per unit. Davis estimates that making the part would require $6.50 per unin of direct mate labor. Davis normally applles overhead using a predetermined overhead rate of 125% of direct labor Cost. Davls estimates Incremental overhead of net Incremental cost or savings of making the component is: Multiple Cholce $2.00 cost per unit. $6.00 cost per unit. $7.00 savings per unit. $6.00 savings per unit. $7.00 cost per unit.

Davis Company currently buys a component part for $8.00 per unit. Davis estimates that making the part would require $6.50 per unin of direct mate labor. Davis normally applles overhead using a predetermined overhead rate of 125% of direct labor Cost. Davls estimates Incremental overhead of net Incremental cost or savings of making the component is: Multiple Cholce $2.00 cost per unit. $6.00 cost per unit. $7.00 savings per unit. $6.00 savings per unit. $7.00 cost per unit.

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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Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost Per Unit $ 6.00 $ 3.50 $ 1.50 $ 4.00 $ 3.00 $ 2.00 $ 1.00 $ 0.50 Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units? (Do not round intermediate calculations.)
Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 52,000 units of RX5 follows. Direct materials $ 4.00 Direct labor 8.00 Overhead 9.00 Total costs per unit $ 21.00 Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 52,000 units of RX5 for $19.00 per unit. Required:1. Determine the total incremental cost of making 52,000 units of RX5.2. Determine the total incremental cost of buying 52,000 units of RX5.3. Should the company make or buy RX5?
The Park Avenue Corporation currently makes a part required in its finished product. The company uses 2,170 units of this part annually. Park Avenue Corp has been approached by a vendor to provide this part for $13.08 each. The following cost information is provided Direct Materials per unit $5.26 Direct Labor per unit $7.30 Variable Factory Overhead per unit $2.50 Fixed Factory Overhead per unit $7.50 How much would Park Avenue Corporation save by having the vendor make the part, instead of making it themselves? Enter your answer rounded to the nearest whole number. Don't enter dollar signs or commas.
A company currently pays $5 per unit to buy a key part for a product it manufactures. It can make the part for $1.50 per unit for direct materials and $2.50 per unit for direct labor. The company normally allocates overhead costs at the rate of 50% of direct labor. Incremental overhead costs to make this part are $0.75 per unit. Should the company make or buy the part?
Factor Company estimates that producing a unit of product would require $8 per unit of direct materials and $24 per unit of direct labor. Factor Company normally applies overhead using a predetermined overhead rate of 150% of direct labor cost. Factor Company estimates incremental overhead of $16 per unit of product. An outside supplier offers to provide Factor Company with all the units it needs at a price of $46 per unit. Factor Company should choose to: Multiple Choice O O O Buy since the relevant cost to make it is $56. Make since the relevant cost to make it is $48. Buy since the relevant cost to make it is $48. Make since the relevant cost to make it is $32. Buy since the relevant cost to make it is $32.
Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: DirectLabor-Hoursper unit AnnualProduction Rims 0.40 18,000 units Posts 0.70 77,000 units Additional information about the company follows: Rims require $14 in direct materials per unit, and Posts require $11. The direct labor wage rate is $15 per hour. Rims are more complex to manufacture than Posts and they require special equipment. The ABC system has the following activity cost pools: Estimated Activity Activity Cost Pool Activity Measure EstimatedOverheadCost Rims Posts Total Machine setups Number of setups $ 30,030 120 80 200 Special processing Machine-hours $ 147,840 2,000 0 2,000 General factory Direct labor-hours $ 576,000 7,000 29,000 36,000 2. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
Unit cost per rims? And Unit cost per posts?
Meman
Ind
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Ashvin
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