Per 15,000 Units Unit per Year $14 $210,000 Direct materials.. Direct labor.... Variable manufacturing overhead Fixed manufacturing overhead, traceable. Fixed manufacturing overhead, allocated. .... 10 150,000 45,000 90,000 135,000 6* 9. Total cost... $42 $630,000 ... *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 1. Assuming that the company has no alternative use for the facilities that are now being used to produce the carburetors, should the outside supplier's offer be accepted? Show all computations. 2. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capac- ity to launch a new product. The segment margin of the new product would be S150,000 per year. Should Troy Engines, Ltd., accept the offer to buy the carburetors for $35 per unit? Sfiow all computations.
Per 15,000 Units Unit per Year $14 $210,000 Direct materials.. Direct labor.... Variable manufacturing overhead Fixed manufacturing overhead, traceable. Fixed manufacturing overhead, allocated. .... 10 150,000 45,000 90,000 135,000 6* 9. Total cost... $42 $630,000 ... *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 1. Assuming that the company has no alternative use for the facilities that are now being used to produce the carburetors, should the outside supplier's offer be accepted? Show all computations. 2. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capac- ity to launch a new product. The segment margin of the new product would be S150,000 per year. Should Troy Engines, Ltd., accept the offer to buy the carburetors for $35 per unit? Sfiow all computations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Help me do excercise 13-3
![| LAplam. Show computations
Should production anu Sale Uf inu
to support your answer.
2.
1.
EXERL
Barlo
contri
long-run profitability of the various product lines.
EXERCISE 13-3 Make or Buy a Component [LO3]
to its own cost of producing the carburetor internally:
Per
15,000 Units
Unit
per Year
Direct materials.
$14
$210,000
Direct labor
10
150,000
Variable manufacturing overhead.
Fixed manufacturing overhead, traceable.
Fixed manufacturing overhead, allocated
Total cost..
3
45,000
90,000
135,000
6*
of
st
$42
$630,000
ne
*One-third supervisory salaries; two-thirds depreciation of special equipment
(no resale value).
Re
1
Required:
1.
Assuming that the company has no alternative use for the facilities that are now being used to
produce the carburetors, should the outside supplier's offer be accepted? Show all computations.
2. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capac-
ity to launch a new product. The segment margin of the new product would be S150,000 per
year. Should Troy Engines, Ltd., accept the offer to buy the carburetors for $35 per unit? Snow,
all computations.
EXERCISE 13-4 Evaluating a Special Order [LO4]
gifts to members of a](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5b476393-1d0f-4e3b-ac62-f7050dcdfb0c%2Fbc0def53-2d52-46b7-a8ae-1bf1bdd623b9%2F0eoe0xk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:| LAplam. Show computations
Should production anu Sale Uf inu
to support your answer.
2.
1.
EXERL
Barlo
contri
long-run profitability of the various product lines.
EXERCISE 13-3 Make or Buy a Component [LO3]
to its own cost of producing the carburetor internally:
Per
15,000 Units
Unit
per Year
Direct materials.
$14
$210,000
Direct labor
10
150,000
Variable manufacturing overhead.
Fixed manufacturing overhead, traceable.
Fixed manufacturing overhead, allocated
Total cost..
3
45,000
90,000
135,000
6*
of
st
$42
$630,000
ne
*One-third supervisory salaries; two-thirds depreciation of special equipment
(no resale value).
Re
1
Required:
1.
Assuming that the company has no alternative use for the facilities that are now being used to
produce the carburetors, should the outside supplier's offer be accepted? Show all computations.
2. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capac-
ity to launch a new product. The segment margin of the new product would be S150,000 per
year. Should Troy Engines, Ltd., accept the offer to buy the carburetors for $35 per unit? Snow,
all computations.
EXERCISE 13-4 Evaluating a Special Order [LO4]
gifts to members of a
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education