Hi expart Provide solution Striker Corporation produces a part that is used in the manufacture of one ofits products. The costs associated with the production of 12,000 units of thispart are as follows:Direct materials86,000 euroDirect labor130,000 euroVariable factory overhead 57,000 euroFixed factory overheadTotal costs135,000 euro408,000 euroOf the fixed factory overhead costs, 63,000 euros is avoidable. Assuming noother use of their facilities, the highest price that McMurphy should be willingto pay to buy externally 12,000 units of the part isa. 273,000 eurob. 345,000 euroc. 408,000 eurod. 336,000 euro

Our goal here is to figure out the highest price that Striker Corporation should be willing to pay…

Answered: Striker Corporation produces a part…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...

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Piels Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows: Direct materials $87,000 Direct labor: $126,000 Variable factory overhead: $58,000 Fixed factory overhead: $136,000 Total costs: $407,000 Of the fixed factory overhead costs, $55,000 is avoidable Assuming no other use of their facilities, the highest price that Piels should be willing to pay for 10,000 units of the part is ?
What are the fixed overhead costs of making the component?
What are the fixed overhead costs of making the component
Sheddon Industries produces two products. The products' identified costs are as follows: Product A Product B Direct materials $20,000 $15,000 Direct labor $12,000 $24,000 The company's overhead costs of $108,000 are allocated based on direct labor cost. Assume 4,000 units of product A and 5,000 units of Product B are produced. What is the cost per unit for product B? (Do not round your intermediate calculations.)
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
Crane Company has decided to introduce a new product that can be manufactured by either a capital-intensive method or a labour-intensive method. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs under the two methods are as follows: Direct materials Direct labour Variable overhead Fixed manufacturing costs Capital-Intensive $10.00 per unit $12.00 per unit $6.00 per unit $2,624,960 Labour-Intensive $11.00 per unit $16.00 per unit $9.00 per unit $1,612,000 Crane's market research department has recommended an introductory unit sales price of $64. The incremental selling expenses are estimated to be $522,080 annually, plus $4 for each unit sold, regardless of the manufacturing method.
Z Inc. manufactures a component Zeta which it uses in production of its main product. The manufacturing costs per unit of Zeta are as follows: Item Cost per unit Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead 3.50 4.50 2.50 2.00 Annual requirement of Zeta is 8,000 units. Fixed manufacturing overhead is allocated to Zeta based on machine-hours used in its production and cannot be avoided if production of Zeta is stopped. An outside supplier has offered Z Inc. to supply 8,000 units at a total cost of $96,000. If Z Inc. purchases the component Zeta from the outside supplier, how will it affect its operating income? a. Operating income will increase by $4,000 b. Operating income will decrease by $4,000 c. Operating income will increase by $6,000 d. Operating income will decrease by $12,000
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Ragemark Company produces 15,000 units of a component used in freezer. An outside supplier has offered to supply the part for $1.42. The unit cost is: Direct material $0.55 Direct labour 0.2 Variable overhead 0.1 Fixed overhead 2.45 Total unit cost $3.30 Required: 1. What are the alternatives for Ragemark Company? 2. Assume that none of the ﬁxed cost is avoidable. List the relevant cost(s) of internal production and of external purchase. 3. Which alternative is more cost effective and by how much?
The Grouper Company manufactures 1,478 units of a part that could be purchased from an outside supplier for $14 each. Grouper’s costs to manufacture each part are as follows: Direct materials $2 Direct labor 4 Variable manufacturing overhead 3 Fixed manufacturing overhead 8 Total $17 All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses. (a) Calculate relevant cost to make. Relevent cost to make $ ___ per unit (c) Calculate net cost to buy if Grouper leases the manufacturing facilities to another company for $9,260 per year. Net cost to buy $ ______

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