The increase in net income from accepting the offer would be Question:33Davis Inc. incurs the following costs to produce 10,000 units of a subcomponent:- $8,400Direct materialsDirect labor-- 11,250Variable overhead 12,600Fixed overhead-- 16,200An outside supplier has offered to sell Davis the subcomponent for $2.85 a unit.If Davis accepts the offer, it could use the production capacity to produce anotherproduct that would generate an additional income of $3,600. The increase (decrease)in net income from accepting the offer would be

To calculate the change in net income from accepting the outside supplier's offer, we need to…

Answered: Question:33 Davis Inc. incurs the…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 15E

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San Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8,400 Direct labor 11,250 Variable overhead 12,600 Fixed overhead 16,200 An outside supplier has offered to sell San Clemente the subcomponent for $2.85 a unit. If San Clemente accepts the offer, by how much will net income increase (decrease)?
Sheffield Corp. incurs the following costs to produce 10500 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $(3600). $9200 Ⓒ$8150. $950. $(950). 11750 13000 An outside supplier has offered to sell Sheffield the subcomponent for $2.80 a unit. No fixed costs are avoidable. If Sheffield accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be 20800
Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent:Direct materials $8400 Direct Labor $11,250 Variable overhead $12,600 Fixed overhead $16,200 An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit. If Clemente accepts the offer, by how much will net income increase (decrease)? $3,750 $19,950 $(8,850) $(2,850)
Direct materials - 8400, Direct labor 11250
Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8,400 Direct labor Variable overhead Fixed overhead $150. O $7,350. An outside supplier has offered to sell Clemente the subcomponent for $2.85 a unit. If Clemente accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3,600. The increase (decrease) in net income from accepting the offer would be $(150). $(3,600). ~ C 11,250 An 12,600 16,200 A W P s Ö
San Clemente Inc. incurs the following costs to produce 10,000 units of a subcomponent: Direct materials $8,400 Direct labor 11,250 Variable overhead 12,600 Fixed overhead 16,200 An outside supplier has offered to sell San Clemente the subcomponent for $2.85 a unit. If San Clemente accepts the offer, by how much will net income increase (decrease)? ($8,850) decrease ($2,850) decrease O $19,950 increase $3,750 increase
Sheffield Industries can produce 600 units of a necessary component part with the following costs: Direct Materials $75900 Direct Labour 20700 Variable Overhead 60300 Fixed Overhead 9700 If Sheffield Industries purchases the component externally, $2800 of the fixed costs can be avoided. Below what minimum external price for the 600 units would Sheffield choose to buy instead of make? $156900 $96600 $159700 $166600

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