Delta Pack Ltd. produces custom packaging. The total manufacturing cost for producing 10,000 boxes is $95,000. Of this amount, $25,000 represents total variable costs. What would be the total production cost if the company produces 14,000 boxes?
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- A company produces widgets at a cost of $5 per widget. If the company produces 1,000 widgets, what is the total direct cost of production?Swifty produces 1,000 units of necessary components with the following costs: Direct material - $30,000 Direct Labor - $19,000 Variable Overhead - $3,000 Fixed Overhead - $7,000. The Fixed Overhead costs cannot be reduced, but another product could be made that would increase profit contribution to $8,000 if the components were acquired externally. If cost maximization is a major consideration and the company would prefer to buy the components, what is the maximum external price that Swifty would be willing to accept for the 1,000 units externally?What is the manufacturing cost per unit?
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- Harcourt Manufacturing (HM) has the capacity to produce 11,800 fax machines per year. HM currently produces and sells 8,800 units per year. The fax machines normally sell for $280 each. Modem Products has offered to buy 3,800 fax machines from HM for $150 each. Unit-level costs associated with manufacturing the fax machines are $51 each for direct labor and $76 each for direct materials. Product-level and facility-level costs are $68,000 and $83,000, respectively. How much would profit increase (decrease) if HM accepted this special order?Thornton Electronics currently produces the shipping containers It uses to deliver the electronics products It sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 5,100 6,400 3,300 9,900 28,000 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Thornton for $2.60 each. Required a. Calculate the total relevant cost. Should Thornton continue to make the containers? b. Thornton could lease the space it currently uses in the manufacturing process. If leasing would produce $12,100 per month, calculate the total avoidable costs. Should Thornton continue to make the containers? a. Total relevant cost a. Should Thornton continue to make the containers? b. Total avoidable cost b. Should Thornton continue to make the containers?Ancinas Company produces printers and uses a standard part in the manufacture of several of its printers. The cost of producing 43,000 parts is $280,000, which includes fixed costs of $136,000 and variable costs of $144,000. The company can buy the part from an outside supplier for $5.00 per unit, and avoid 30% of the fixed costs. If Ancinas Company makes the part, how much will its operating income be? $30,200 less than if the company bought the part. $30,200 greater than if the company bought the part. $65,000 greater than if the company bought the part. $65,000 less than if the company bought the part.
