Woodstock Binding has two service departments, IT (Information Technology) and HR (Human Resources), and two operatingdepartments, Publishing and Binding. Management has decided to allocate IT costs on the basis of IT Tickets (issued with each ITrequest) in each department and HR costs on the basis of employees in each department.The following data appear in the company records for the current period:IT ticketsEmployeesDepartment direct costs.ITHR0161,5250Publishing2,44024$ 152,000$ 247,950$ 431,000Binding2,13540$ 392,500Woodstock Binding estimates that the variable costs in the IT Department total $112,500, and in the HR Department variable costs to$142,500. Avoidable fixed costs in the IT Department are $18,250.Required:If Woodstock Binding outsources the IT Department functions, what is the maximum it can pay an outside vendor without increasingtotal costs?Note: Do not round intermediate calculations.× Answer is complete but not entirely correct.Maximum amount$132,180 x

Total cost:The total cost refers to the overall cost of the production of the company which includes…

Required: If Woodstock Binding outsources the IT Department functions, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. > Answer is complete but not entirely correct. Maximum amount $ 132,180 ×

Required: If Woodstock Binding outsources the IT Department functions, what is the maximum it can pay an outside vendor without increasing total costs? Note: Do not round intermediate calculations. > Answer is complete but not entirely correct. Maximum amount $ 132,180 ×

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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Problem 6-18 (Algo) Relevant Cost Analysis in a Variety of Situations [LO6-2, LO6-3, LO6-4] Andretti Company has a single product called a Dak. The company normally produces and sells 87,000 Daks each year at a selling price of $60 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 7.50 8.00 2.90 5.00 ($435,000 total) 2.70 2.50 ($217,500 total) $28.60 A number of questions relating to the production and sale of Daks follow. Each question is independent. Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 113,100 Daks each year without any increase in fixed. manufacturing overhead costs. The company could increase its unit sales by 30% above the present 87,000 units each year if it were willing to increase the fixed selling expenses by $110,000. What is the financial…
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Hi, I also need help finding the highest acceptable transfer price and the lowest acceptable transfer price. Thanks
Lantz Family Restaurant operates in a suburb of a major city. Recently, the managers at Lantz have noticed an increase in the use of delivery apps such as Grubhub and DoorDash by their customers. The average fee paid by Lantz for this service currently is $6 per delivery. The managers are considering starting their own delivery service that they estimate would attract about 75 percent of the current deliveries. (Not all customers will switch, even though the service would be free, because of the convenience of the app, habit, and other factors.) Estimates by the financial consultant to Lantz are that the cost of the service, if provided by Lantz, would be $3.90 per delivery and an incremental $1,297 per month fixed costs. In an average month, 800 orders Lantz receives are to be delivered. Required: a. Prepare a schedule that shows the differential costs. b. Should Lantz Family Restaurant provide their own delivery service or continue to rely on other firms?
Some advantages of the dual-rate method are: (Select all that apply.) O A. Operating department managers will only use an external provider of material-handling services if it costs more than the variable rate cost per hour ($40 in our scenario here) charged by the Materials Management Department. The single-rate method therefore avoids the potential conflict of interest that can arise under the dual-rate method. O B. By charging the fixed costs of resources budgeted to be used by the operating departments as a lump sum, the dual-rate method succeeds in removing fixed costs from the operating department managers' consideration when making marginal decisions to outsource services. O C. The dual-rate method guides department managers to make decisions that benefit both the organization as a whole and each department because it signals to department managers that variable costs and fixed costs behave differently. O D. Operating department managers will only use an external provider of…
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Two questions can you help !
Q1:-A pooducen faces a f- Rs, So and avariable cosk Rs,Spes umit ob output when he produces less than 200 Units o output: Assuming that total cost funpetion is limeax, detemine the eajuation of the total cost of hunction. what is the break even level of fixed.cost of out pu-i the psice of output is Rscl0 pen umit, Also doaw the relevant gaphs Determime the producers net Jevenue u out pu is 12 units and the poice of outpuh Rs, S, RS,10and RSIS 8es pectively is
QRC Company is trying to decide which one of two alternatives it will accept. The costs and revenues associated with each alternative are listed below: Projected revenue Unit-level costs Batch-level costs Product-level costs Facility-level costs What is the differential revenue for this decision? Multiple Choice O $110.000 $85,000 $205,000 Alternative A $205,000 39,000 26,500 29,000 24,000 $290,000 Alternative B $290,000 50,000 38,000 31,000 26,500