Question 4 Mikey Motor Ltd., manufactures a variety of motorcycles. The company has always produced all of the necessary parts for its motorcycles, including engines. An outside supplier has offered to sell one type of engine to Mikey Motor Ltd., for a cost of $31 per unit. To evaluate this offer, Mikey Motor Ltd., has garnered the following information relating to its own cost of producing the engine internally: Assuming the company has no alternative use for the facilities that are now being used to produce the engines, what would be the financial advantage (disadvantage) of buying 10,000 engines from the outside supplier? Direct Materials $15 Per Unit Variable manufacturing $4 overhead Fixed Direct Labor $10 $100,000 manufacturing overhead, traceable* 10,000 units per year $3 $150,000 $40,000 $30,000

Question 4 Mikey Motor Ltd., manufactures a variety of motorcycles. The company has always produced all of the necessary parts for its motorcycles, including engines. An outside supplier has offered to sell one type of engine to Mikey Motor Ltd., for a cost of $31 per unit. To evaluate this offer, Mikey Motor Ltd., has garnered the following information relating to its own cost of producing the engine internally: Assuming the company has no alternative use for the facilities that are now being used to produce the engines, what would be the financial advantage (disadvantage) of buying 10,000 engines from the outside supplier? Direct Materials $15 Per Unit Variable manufacturing $4 overhead Fixed Direct Labor $10 $100,000 manufacturing overhead, traceable* 10,000 units per year $3 $150,000 $40,000 $30,000

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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Concord Corporation can produce 100 units of a necessary component part with the following costs: Direct Materials $23000 Direct Labor 9000 Variable Overhead Fixed Overhead 25000 O $50000 O $57000 O $62000 O $64000 12000 If Concord Corporation purchases the component externally, $5000 of the fixed costs can be avoided. Below what external price for the 100 units would Concord choose to buy instead of make the units?
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Subject: acounting
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following: (FV of $1, PV of $1, FVA of S1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Machine À could be purchased for $27,000. It will last 10 years with annual maintenance costs of $900 per year. After 10 years the machine can be sold for $2,835. Machine 8 could be purchased for $22,500. It also will last 10 years and will require maintenance costs of $3,600 in year three, $4,500 in year six, and $5,400 in year eight. After 10 years, the machine will have no salvage value. Required: Assume an interest rate of 8% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year. Ignore income tax considerations. Calculate the present value of Machine A & Machine B. Which machine Esquire…
A3
Two alternatives, code-named X and Y, are under consideration at Guyer Corporation. Costs associated with the alternatives are listed below. Materials costs Processing costs Equipment rental Occupancy costs Alternative X $45,000 $49, 400 $18, 400 $17, 600 Multiple Choice What is the financial advantage (disadvantage) of Alternative Y over Alternative X? Show Transcribed Text $(144,800) $130,400 Alternative Y $65, 300 $49, 400 $18, 400 $26, 100 $159,200 $(28,800) G
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