Easton Company makes and sells scooters. Easton incurred the following costs in its most recent fiscal year: Cost Items Appearing on the Income Statement per unit) Materials cost ($10 Company president's salary Depreciation on manufacturing equipment Salaries of administrative personnel Research and development costs Labor cost ($4 per unit) Advertising costs (150,000 per year) Shipping and handling ($500 per year) Real estate taxes on factory Inspection costs Easton can currently purchase the scooters it makes from Weston Company. If the company purchases the scooters, Easton would still continue to use its own logo, sales staff, and advertising programs. If Easton outsources the scooters to Weston, which of the following costs would be relevant to the outsourcing decision? Multiple Choice Materials cost Shipping and handling Inspection costs All of these answers are correct.
Easton Company makes and sells scooters. Easton incurred the following costs in its most recent fiscal year: Cost Items Appearing on the Income Statement per unit) Materials cost ($10 Company president's salary Depreciation on manufacturing equipment Salaries of administrative personnel Research and development costs Labor cost ($4 per unit) Advertising costs (150,000 per year) Shipping and handling ($500 per year) Real estate taxes on factory Inspection costs Easton can currently purchase the scooters it makes from Weston Company. If the company purchases the scooters, Easton would still continue to use its own logo, sales staff, and advertising programs. If Easton outsources the scooters to Weston, which of the following costs would be relevant to the outsourcing decision? Multiple Choice Materials cost Shipping and handling Inspection costs All of these answers are correct.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Easton Company makes and sells scooters. Easton incurred the following costs in its most recent fiscal year:
Cost Items Appearing on the Income Statement
Materials cost ($10 per unit)
Company president's salary
Depreciation on manufacturing equipment
Salaries of administrative personnel
Labor cost ($4 per unit)
Advertising costs (150,000 per year)
Shipping and handling ($500 per year)
Research and development costs
Real estate taxes on factory
Inspection costs
Easton can currently purchase the scooters it makes from Weston Company. If the company purchases the scooters, Easton would still continue to use its own logo, sales staff, and advertising programs. If Easton outsources the scooters to Weston,
which of the following costs would be relevant to the outsourcing decision?
Multiple Choice
X
Materials cost
Shipping and handling
Inspection costs
All of these answers are correct.
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