U-RIDE, Incorporated currently produces the electric engines that are used in golf carts made and sold by the Company. Electco has offered to sell the electric engines to U-RIDE at a price of $291 each.Current production information follows:Unit-level material and labor$240Facility-level depreciation of manufacturing equipmentProduct-level engine production supervisor's salary$6,300 /month$3,300 /month$21,500Annual facility-level utilitiesU-RIDE is currently operating profitably producing and selling 3,300 engines a year using 80% of its manufacturing capacity. Which of the following is true?Multiple ChoiceOOU-RIDE should make the engines for cost savings of $51 per unit.Buying the units would increase U-RIDE's cost by $39 per unit.U-RIDE has avoidable costs of greater than $291 per unit and should therefore buy the engines.Buying the units would increase profitability by $90 per unit.

Facility-level depreciation and Annual facility-level utilities would not be considered for…

Answered: J-RIDE is currently operating…

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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Foc Give me correct answer with explanation.
Brecht Ltd produces a standard product which is sold for £85 each. The business incurred variable costs of £550,000 last year and total costs were £850,000. The business sold 11,000 units during the year and was operating at full capacity. The business intends to expand its output. This will involve building a factory extension, which will increase annual fixed costs by £120,000 per year. 1. Calculate the number of products that need to be sold in order for the business to break even, after the new factory extension has been built. 2. Calculate the profit (loss) that would be generated if the business sold 10,000 units (i) before the factory extension is built. (ii) after the factory extension is built.
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J-RIDE is currently operating profitably producing and selling 3,300 engines a year using 80% of its manufacturing capacity. Which of the following is true?