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Items 1 and 2 are based on Kingston Company, which needs 10,000 units of a certain part to be used in its production cycle. If Kingston buys the part from Utica Company instead of making it Kingston could not use the realized facilities in another manufacturing activity. 60% of the fixed overhead applied will continue regardless of what decision is made. The following information is available: Cost of Kingston to make the part: Direct materials P6 Direct labor Variable overhead Fixed overhead applied 24 12 15 Cost to buy the part from Utica Company P53 1. In deciding whether to make or buy the part, Kingston's total relevant costs to make the part are: b. P480,000 a. P342,000 c. P530,000 d. P570,000 2. Which alternative is more desirable for Kingston and by what amount? b. Make, P50,000 c. Buy, P40,000 a. Buy, P50,000 d. Make, P40,000

Items 1 and 2 are based on Kingston Company, which needs 10,000 units of a certain part to be used in its production cycle. If Kingston buys the part from Utica Company instead of making it Kingston could not use the realized facilities in another manufacturing activity. 60% of the fixed overhead applied will continue regardless of what decision is made. The following information is available: Cost of Kingston to make the part: Direct materials P6 Direct labor Variable overhead Fixed overhead applied 24 12 15 Cost to buy the part from Utica Company P53 1. In deciding whether to make or buy the part, Kingston's total relevant costs to make the part are: b. P480,000 a. P342,000 c. P530,000 d. P570,000 2. Which alternative is more desirable for Kingston and by what amount? b. Make, P50,000 c. Buy, P40,000 a. Buy, P50,000 d. Make, P40,000

FINANCIAL ACCOUNTING
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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Answers for the number 1 and 2 please! And do provide solutions as possible. Thank you!

Items 1 and 2 are based on Kingston Company, which needs 10,000 units of a certain part to be used in its production cycle. If Kingston buys the part from Utica Company instead of making it Kingston could not use the realized facilities in another manufacturing activity. 60% of the fixed overhead applied will continue regardless of what decision is made. The following information is available: Cost of Kingston to make the part: Direct materials Direct labor Variable overhead P6 24 12 Fixed overhead applied 15 Cost to buy the part from Utica Company P53 1. In deciding whether to make or buy the part, Kingston's total relevant costs to make the part are: d. P570,000 a. P342,000 b. P480,000 c. P530,000 2. Which alternative is more desirable for Kingston and by what amount? c. Buy, P40,000 a. Buy, P50,000 b. Make, P50,000 d. Make, P40,000
Transcribed Image Text:Items 1 and 2 are based on Kingston Company, which needs 10,000 units of a certain part to be used in its production cycle. If Kingston buys the part from Utica Company instead of making it Kingston could not use the realized facilities in another manufacturing activity. 60% of the fixed overhead applied will continue regardless of what decision is made. The following information is available: Cost of Kingston to make the part: Direct materials Direct labor Variable overhead P6 24 12 Fixed overhead applied 15 Cost to buy the part from Utica Company P53 1. In deciding whether to make or buy the part, Kingston's total relevant costs to make the part are: d. P570,000 a. P342,000 b. P480,000 c. P530,000 2. Which alternative is more desirable for Kingston and by what amount? c. Buy, P40,000 a. Buy, P50,000 b. Make, P50,000 d. Make, P40,000
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