Help Quiche & Tell, Inc., is considering outsourcing one of its many products rather than making it internally. The supplier will charge $15,000 for 3,000 quiches. The costs per quiche tomake this product include:Cost per Quiche$1Production Manager's SalaryDirect Labor$2Direct Materials$3$4Allocated Unavoidable Corporate OverheadCalculate the relevant incremental cost per quiche of making the product.

Outsourcing is the process of hiring a technical team to produce the goods or services that were…

Quiche & Tell, Inc., is considering outsourcing one of its many products răther than make this product include: Cost per Quiche Production Manager's Salary $1 $2 Direct Labor $3 Direct Materials $4 Allocated Unavoidable Corporate Overhead Calculate the relevant incremental cost per quiche of making the product.

Quiche & Tell, Inc., is considering outsourcing one of its many products răther than make this product include: Cost per Quiche Production Manager's Salary $1 $2 Direct Labor $3 Direct Materials $4 Allocated Unavoidable Corporate Overhead Calculate the relevant incremental cost per quiche of making the product.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EA: Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special...

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A company is considering a special order for 1,000 units to be priced at 8.90 (the normal price would be 11.50). The order would require specialized materials costing 4.00 per unit. Direct labor and variable factory overhead would cost 2.15 per unit. Fixed factory overhead is 1.20 per unit. However, the company has excess capacity, and acceptance of the order would not raise total fixed factory overhead. The warehouse, however, would have to add capacity costing 1,300. Which of the following is relevant to the special order? a. 11.50 b. 1.20 c. 7.35 d. 8.90
Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?
Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
Oat Treats manufactures various types of cereal bars featuring oats. Simmons Cereal Company has approached Oat Treats with a proposal to sell the company its top selling oat cereal bar at a price of $27,500 for 20,000 bars. The costs shown are associated with production of 20,000 oat bars currently. The manufacturing overhead consists of $3,000 of variable costs with the balance being allocated to fixed costs. Should Oat Treats make or buy the oat bars?
Daily Kneads, Inc., is considering outsourcing one of its many products rather than making it internally. The supplier will charge $20,000 for 20,000 pounds of the product. The costs per pound to make this product include: Cost per Pound $0.30 Direct Labor Direct Materials $0.60 $0.70 Allocated Unavoidable Overhead If Daily Kneads outsources, what is the savings (or loss) per pound for the company as a whole? If the amount is a loss include a negative sign (not parentheses) in your answer. "_"
What are the fixed overhead costs of making the component?
XYZ Corp. currently produces a part but is looking to reduce costs. Units 20,000 Per Unit Total Cost Direct Materials $ 10 $ 200,000 Direct Labor $ 5 $ 100,000 Mfg. Overhead $ 8 $ 160,000 Total $ 23 $ 460,000 The fixed mfg. overhead includes $75,000 of costs that will continue even if outsourced. If the part is outsourced, the space can be used to make other parts and generate an additional $27,000 of contribution margin. A. Show calculations to determine how much XYZ would consider paying for the part from an outside source.
Sheffield Corp. incurs the following costs to produce 9000 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $9000 O $28950 O $(3500) $8950 O $(3250) 12500 12200 20000 An outside supplier has offered to sell Sheffield the subcomponent for $2.75 a unit. No fixed overhead costs are avoidable. If Sheffield accepts the offer, by how much will net income increase (decrease)?
Charge Company manufactures a part for its production cycle. The annual costs per unit for 5,000 units of the part are given below. The fixed factory overhead costs are unavoidable. Another company has offered to sell 5,000 units of the same part to Charge Company for $15 per unit. The facilities currently used to make the part could be rented out to another manufacturer for $20,000 a year. Charge Company should Per Unit Direct materials $3.00 Direct labor 5.00 Variable factory overhead Fixed factory overhead Total costs 4.00 2.00 $14.00 buy the part and rent facilities to save $5,000 ) make the part to save $15,000 O buy the part and rent facilities to save $15,000 make the part to save $5,000 O make the part to save $10,000 O
Alpha currently makes a subassembly for its main product. The costs per unit are as follows: Direct materials $ 45.00 Direct labor 35.00 Variable overhead Fixed overhead 30.00 Total $143.00 33.00 Vendor has contacted Alpha with an offer to sell 5,000 of the subassemblies for $135.00 each. Alpha will eliminate $85,000 of fixed overhead if it accepts the proposal. 25) Which option, make or buy, gives Alpha the higher operating income? By how much?
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 Clemente the subcomponent for $2.85 a unit. If Clemente could avoid $3,000 of fixed overhead by accepting the offer, net income would increase (decrease) by Group of answer choices $750. $(3,150). $(5,850). $6,750.
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