i have 4 attachement for this question which i will send you in 2 sumbmission. Required.1. Seebach is unsure what the company should do and would like an analysis showing the unit costs and total costs for each of the twoalternatives given above. Assume that 30,000 carburetors are needed each year.a. What will be the total relevant cost of 30,000 subassemblies if they are manufactured internally as compared to being purchased?Total relevant cost (30,000 subassemblies)b. What would be the per unit cost of the each subassembly manufactured internally? (Do not round intermediate calculations.Round your answer to 2 decimal places.)Per unit cost of subassembly “That old equipment for producing carburetors is worn out," said Bill Seebach, president of Hondrich Company. "We need to make adecision quickly." The company is trying to decide whether it should rent new equipment and continue to make its carburetorsinternally or whether it should discontinue production of its carburetors and purchase them from an outside supplier. The alternativesfollow:Alternative 1: Rent new equipment for producing the carburetors for $189,000 per year.Alternative 2: Purchase carburetors from an outside supplier for $20.25 each.Hondrich Company's costs per unit of producing the carburetors internally (with the old equipment) are given below. These costsare based on a current activity level of 30,000 units per year:Direct materials$ 5.708.00Direct labourVariable overhead2.40Fixed overhead ($3.15 supervision, $1.80 depreciation,and $4.00 general company overhead)8.95Total cost per unit$25.05The new equipment would be more efficient and, according to the manufacturer, would reduce direct labour costs and variableoverhead costs by 25%. Supervision cost ($94,500 per year) and direct materials cost per unit would not be affected by the newequipment. The new equipment's capacity would be 50,000 carburetors per year.„The total.general.company overhead wouldbe unaffected bv.this decision..

Solution: The given question is based on the relevant costs on Make or Buy decisions. In a make or…

Seebach is unsure what the company should do and would like an analysis showing the unit costs and total costs Iternatives given above. Assume that 30,000 carburetors are needed each year. What will be the total relevant cost of 30,000 subassemblies if they are manufactured internally as compared to Total relevant cost (30,000 subassemblies) . What would be the per unit cost of the each subassembly manufactured internally? (Do not round intermediate ound your answer to 2 decimal places.) Per unit cost of subassembly

Seebach is unsure what the company should do and would like an analysis showing the unit costs and total costs Iternatives given above. Assume that 30,000 carburetors are needed each year. What will be the total relevant cost of 30,000 subassemblies if they are manufactured internally as compared to Total relevant cost (30,000 subassemblies) . What would be the per unit cost of the each subassembly manufactured internally? (Do not round intermediate ound your answer to 2 decimal places.) Per unit cost of subassembly

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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