Wildhorse Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supplieroffers to make 14,000 of the assembly part at $6 per unit. If the offer is accepted, Wildhorse will save all variable costs but no fixedcosts. Prepare an analysis showing the total cost saving, if any, that Wildhorse will realize by buying the part. (Enter negative amountsusing either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)Variable manufacturing costs$Fixed manufacturing costsPurchase priceTotal annual cost$MakeBuyNet IncomeIncrease (Decrease)$$The decision should be tothe part.$$

Step 1Variable manufacturing cost per unit = $5 Fixed manufacturing cost per unit = $3 Purchase…

Answered: Wildhorse Industries incurs unit costs…

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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I need help with requirement 2 please.
Skip Consulting helped Schmidt Roofers put various cost saving techniques into place. Thecontract specifies that Skip will receive a flat fee of $70,000 and an additional $19,000 if Schmidtattains a target amount of cost savings. Skip estimates a 20% chance that Schmidt will reach thetarget for cost savings. Assuming that Skip uses the expected-value approach, what is thetransaction price for this product?a. $19,000b. $70,000c. $73,800d. $89,000
Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $21.15 per pound and costs $16.40 per pound to produce. Product D would sell for $42.80 per pound and would require an additional cost of $9.55 per pound to produce. The differential cost of producing Product D is Oa. $9.55 per pound Ob. $5.73 per pound Oc. $7.64 per pound Od. $11.46 per pound
The Lamar Company manufactures wiring tools. The company is currently producing well below its full capacity. The Boston Company has approached Lamar with an offer to buy 15,000 tools at $1.80 each. Lamar sells its tools wholesale for $1.90 each; the average cost per unit is $1.88, of which $0.32 is fixed costs. If Lamar were to accept Boston's offer, what would be the increase in Lamar's operating profits? Multiple Choice O O $1,500. $5,100. $1,200. $3,600.
G
Answer the following questions. 1. Dalton Computers makes 5,500 units of a circuit board, CB76 at a cost of $250 each. Variable cost per unit is $170 and fixed cost per unit is $80. Peach Electronics offers to supply 5,500 units of CB76 for $230. If Dalton buys from Peach it will be able to save $15 per unit in fixed costs but continue to incur the remaining $65 per unit. Should Dalton accept Peach's offer? Explain. 2. TX Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: (Click the icon to view the information.) TX Manufacturing uses straight-line depreciation. Ignore the time value of money and income taxes. Should TX Manufacturing replace the old machine? Explain. Relevant COSIS. Variable costs per unit Avoidable fixed costs per unit Purchase price per unit Unit relevant cost Cash operating costs Current disposal value of old machine Cost of new machine $ Total relevant costs 170 15 $ 185 $ 230 230 Dalton Computers should…
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Sweet Acacia Inc. makes unfinished bookcases that it sells for $58. Production costs are $38 variable and $9 fixed. Because it has unused capacity, Sweet Acacia is considering finishing the bookcases and selling them for $72. Variable finishing costs are expected to be $7 per unit with no increase in fixed costs. Prepare an analysis on a per-unit basis that shows whether Sweet Acacia should sell unfinished or finished bookcases. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Sales per unit Variable cost per unit Fixed cost per unit Total per unit cost Net income per unit The bookcases 69 $ Sell ✓processed further. LA GA Process Further $ $ Net Income Increase (Decrease)
s
Marigold Corp. is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $27 and Marigold would sell it for $60. The cost to assemble the product is estimated at $13 per unit and the company believes the market would support a price of $64 on the assembled unit. What decision should Marigold make and why? Sell before assembly because the company will be better off by $9 per unit. Sell before assembly because the company will be better off by $4 per unit. Process further because the company will be better off by $18 per unit. Process further because the company will be better off by $20 per unit.
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