quired per unit unit I overhead: 4.00 6.50 $6.50 $8.00 9.00 8.00 7.00 8.00 6.50 9.00

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Tyson Corner Manufacturing produces two bearings: C15 and C19. Data regarding these two bearings follow.
Machine hours required per unit
Standard cost per unit
Direct material
Direct labor
**
Manufacturing overhead:
Variable*
Fixed**
Total
Applied on the basis of direct labor hours
Applied on the basis of machine hours
C15
4.00
$ 6.50
9.00
Required A
7.00
8.00
$30.50
The company requires 7,200 units of C15 and 11,400 units of C19. Recently, management decided to devote additional machine time to
other product lines, resulting in only 70,400 machine hours per year that can be dedicated to production of the bearings. An outside
company has offered to sell Tyson Corner the bearings at prices of $33.50 for C15 and $33.50 for C19.
Required B Required C
Direct material
Direct labor
Variable overhead
Total variable cost
C19
6.50
Required:
a. Assume that Tyson Corner decided to produce all C15s and purchase C19s only as needed. Determine the number of C19s to be
purchased.
$ 8.00
8.00
b. Compute the net benefit to the company of manufacturing (rather than purchasing) a unit of C15. Repeat the calculation for a unit of
C19. (Note: in answering this question, do not take into consideration any machine hours constraint).
c. Tyson Corner lacks sufficient machine time to produce all of the C15s and C19s needed. Which component (C15 or C19) should
Tyson Corner manufacture first with the limited machine hours available?
6.50
9.00
$31.50
Complete this question by entering your answers in the tabs below.
C15
Compute the net benefit to the company of manufacturing (rather than purchasing) a unit of C15. Repeat the calculation for a
unit of C19. (Note: in answering this question, do not take into consideration any machine hours constraint). (Round your
answers to 2 decimal places.)
C19
Transcribed Image Text:Tyson Corner Manufacturing produces two bearings: C15 and C19. Data regarding these two bearings follow. Machine hours required per unit Standard cost per unit Direct material Direct labor ** Manufacturing overhead: Variable* Fixed** Total Applied on the basis of direct labor hours Applied on the basis of machine hours C15 4.00 $ 6.50 9.00 Required A 7.00 8.00 $30.50 The company requires 7,200 units of C15 and 11,400 units of C19. Recently, management decided to devote additional machine time to other product lines, resulting in only 70,400 machine hours per year that can be dedicated to production of the bearings. An outside company has offered to sell Tyson Corner the bearings at prices of $33.50 for C15 and $33.50 for C19. Required B Required C Direct material Direct labor Variable overhead Total variable cost C19 6.50 Required: a. Assume that Tyson Corner decided to produce all C15s and purchase C19s only as needed. Determine the number of C19s to be purchased. $ 8.00 8.00 b. Compute the net benefit to the company of manufacturing (rather than purchasing) a unit of C15. Repeat the calculation for a unit of C19. (Note: in answering this question, do not take into consideration any machine hours constraint). c. Tyson Corner lacks sufficient machine time to produce all of the C15s and C19s needed. Which component (C15 or C19) should Tyson Corner manufacture first with the limited machine hours available? 6.50 9.00 $31.50 Complete this question by entering your answers in the tabs below. C15 Compute the net benefit to the company of manufacturing (rather than purchasing) a unit of C15. Repeat the calculation for a unit of C19. (Note: in answering this question, do not take into consideration any machine hours constraint). (Round your answers to 2 decimal places.) C19
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