Supler Corporation produces a part used in the manufacture of one of its prod product cost is $21, computed as follows: Direct materials $ 8 Direct labor 7 Variable manufacturing overhead Fixed manufacturing overhead 1 5 Unit product cost $ 21 An outside supplier has offered to provide the annual requirement of 5,500 of only $13 each. The company estimates that 60% of the fixed manufacturing ov
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- Cotton Corp. currently makes 12,500 subcomponents a year in one of its factories. The unit costs to produce are: Per unit Direct materials $ 24.00 Direct labor 20.00 Variable manufacturing overhead 19.00 Fixed manufacturing overhead 9.00 Total unit cost $ 72.00 An outside supplier has offered to provide Cotton Corp. with the 12,500 subcomponents at an $76.00 per unit price. Fixed overhead is not avoidable. If Cotton Corp. accepts the outside offer, what will be the effect on short-term profits? Multiple Choice no change $78,750 increase $112,500 increase $162,500 decreaseEach year, Basu Company produces 24,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.17. The unit cost is: Direct materials $0.72 Direct labor 0.25 Variable overhead 0.13 Fixed overhead 2.95 Total unit cost $4.05 Required: 1. What are the alternatives for Basu Company? 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. List the relevant cost(s) of external purchase. 3. Which alternative is more cost effective and by how much? _____ by $___ 4. What if $18,560 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? ____ by $____CM Manufacturing has provided the following unit costs pertaining to a component they manufacture and use in the production of one of their main products: Direct materials $315 Direct labor (variable) 96 Variable manufacturing overhead 72 Fixed manufacturing overhead 29 A supplier has offered to provide the component to CM manufacturing for 500 per unit. CM Manufacturing currently has no plans to use idle space that would be created if accepting offer from supplier. Assuming that CM Manufacturing needs 2,000 components annually and the fixed manufacturing overhead is unavoidable, what would be the impact on operating income the company outsources? **Show your work to support your answer.
- Andretti Company has a single product called a Dak. The company normally produces and sells 84,000 Daks each year at a selling Each question is independent.price of $62 per unit A number of questions relating to the production and sale of Daks follow. The company's unit costs at this level of activity are given below:Direct materials $ 7.50 Direct labor 11.00 Variable manufacturing overhead 1.90 Fixed manufacturing overhead 5.00 ($420,000 total) Variable selling expenses 3.70 Fixed selling expenses 4.50 ($378,000 total) Total cost per unit $ 33.60 Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 100,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 84,000 units each year if it were willing to increase the fixed selling expenses by $120,000. What is the financial advantage (disadvantage) of investing an additional $120,000 in fixed selling expenses? b. Would the…Norton Ltd manufactures a single product, which is sold for N$136 per unit.The standard variable costs per unit of the product are: Direct Material 4 kilos at N$7.50 per kilo Direct labour 5 hours at N$11 per hour Production overhead N$2.4 per direct labour hour Sales overhead N$ 5 per unit The company expects to manufacture and sell 8,000 units in total during the forthcoming year (Year 1).The fixed overhead costs for the forthcoming year are: N$ Production 60 000 Administration 35 000 Sales 11 000 REQUIRED:a) Calculate for the forthcoming year (Year 1):i. The break-even point in dollars and unitsii. The margin of safety in dollars and units iii. The amount of sales in units that would earn the company a profit of $180,000Every year Blue Industries manufactures 7,300 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total (a) $3.00 Total relevant cost to make $ 11.00 Net relevant cost to buy $ 8.00 Cullumber, Inc., has offered to sell 7,300 units f part 231 to Blue for $33 per unit. If Blue accepts Cullumber's offer, its freed-up facilities could be used to earn $10,700 in contribution margin by manufacturing part 240. In addition, Blue would eliminate 50% of the fixed overhead applied to part 231. 10.00 $32.00 Calculate total relevant cost to make and net cost to buy.
- Calculate the expected costs when production is 5100 units. Sheridan Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,200 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $390 and $290, respectively. Production in Units Production Costs Direct materials. Direct labour Utilities Property taxes Indirect labour Supervisory salaries Maintenance Depreciation 3,200 $7,936 15,264 1,798 1,000 4,512 1,900 1,602 2,550DengerA VACUUM MANAUFACTUER HAS PREPARED THE FOLLOWING HAS THE FOLLOWING COST DATA FOR MANUFACTURING ONE OF ITS ENGINE COMPONENTS BASED ON THE ANNUAL PRODUCTION OF 50,000 UNITS DIRECT MATERIALS $75,000 DIRECT LABOR $100,000 TOTAL $175,000 IN ADDITION, VARIABLE FACTORY OVERHEAD IS APPLIED AT $7.50 PER UNIT. FIXED FACTORY OVERHEAD IS APPLIED AT 150% OF DIRECT LABOUR COST PER UNIT. THE VACUUM SELLS FOR $150 EACH. A THIRD PARTY HAS OFFERED TO MAKE THE ENGINES FOR $60 PER UNIT. 75% OF THE FIXED FACTORY OVERHEAD, WHICH REPRESENTS EXECUTIVE SALARIES, RENT, DEPRECIATION, AND TAXES, CONTINUES REGARDLESS OF DECISION. sHOULD THE COMPANY MAKE OR BUY THE ENGINES?
- Andretti Company has a single product called a Dak. The company normally produces and sells 85,000 Daks each year at a selling ato 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 $ 9.50 11.00 3.70 6.00 ($510,000 total) 4.70 3.50 ($297,500 total) $ 38.40 A number of questions relating to the production and sale of Daks follow. Each question is independent. V Screenshot 2023-07-20 at 7.34... Ⓡ Share the document 4. Due to a strike in its supplier's plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were…Han Products manufactures 28,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 Is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 3.60 11.00 2.40 6.00 $23.00 An outside supplier has offered to sell 28,000 units of part S-6 each year to Han Products for $21 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $78,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier. Required: What is the financial advantage (disadvantage) of accepting the outside supplier's offer?Wehrs Corporation has received a request for a special order of 9,800 units of product K19 for $47.50 each. The normal selling price of this product is $52.60 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product K19 is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product.cost $ 18.30 7.60 4.80 7.70 $ 38.40 Direct labor is a varlable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product K19 that would increase the variable costs by $7.20 per unit and that would require a one-time investment of $47,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. Required: Determine the effect on the company's total net…