Gent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4,100 units were produced: Direct materials $4.00 Direct labor 1.50 Manufacturing overhead 1.30 Total $6.80 Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,200 units of part A for the next year's production. Cory Corporation has offered to supply 6,200 units of pårt A at a price of $7.00 per unit. If Gent accepts the offer, all of the variable costs and $1,230 of the fixed costs will be avoided. A. Calculate the differential cost? Cost to buy Cost to make Differential cost B. Should Gent Designs accept the offer from Cory Corporation? Gent Designs
Gent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4,100 units were produced: Direct materials $4.00 Direct labor 1.50 Manufacturing overhead 1.30 Total $6.80 Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,200 units of part A for the next year's production. Cory Corporation has offered to supply 6,200 units of pårt A at a price of $7.00 per unit. If Gent accepts the offer, all of the variable costs and $1,230 of the fixed costs will be avoided. A. Calculate the differential cost? Cost to buy Cost to make Differential cost B. Should Gent Designs accept the offer from Cory Corporation? Gent Designs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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May you please answer both questions (:
Transcribed Image Text:Gent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4,100 units were
produced:
Direct materials
$4.00
Direct labor
1.50
Manufacturing overhead
1.30
Total
$6.80
Variable mnanufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,200 units of part A for the next year's
production.
Cory Corporation has offered to supply 6,200 units of part A at a price of $7.00 per unit. If Gent accepts the offer, all of the variable costs and $1,230 of the fixed costs will be avoided.
A. Calculate the differential cost?
Cost to buy
Cost to make
Differential cost
B. Should Gent Designs accept the offer from Cory Corporation?
Gent Designs
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Transcribed Image Text:progress%3Dtalse
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Print Item
Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki
shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution
margin per pair of pants of $32. If it is assumed that Rough Stuff has 4,680 hours available on the cutting machine to service a minimum demand for each product of 3,400 units, how
many of each product should be made?
Khaki shorts
pairs
Khaki pants
pairs
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