Zen Inc. uses one raw material type in its manufacturing process. It needs 3,750 kilos of this material each month. It incurs P500 each time when making and receiving orders. Annual carrying cost per unit costs P15 in warehousing and P5 in financing costs. If Zen purchases

Zen Inc. uses one raw material type in its manufacturing process. It needs 3,750 kilos of this material each month. It incurs P500 each time when making and receiving orders. Annual carrying cost per unit costs P15 in warehousing and P5 in financing costs. If Zen purchases

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Jordan Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs Allocated facility-level costs $ 5,700 6,800 3,900 8,100 27,200 One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Jordan for $2.90 each. Required a. Calculate the total relevant cost. Should Jordan continue to make the containers? b. Jordan could lease the space it currently uses in the manufacturing process. If leasing would produce $12.300 per rhonth, calculate the total avoidable costs. Should Jordan continue to make the containers? a. Total relevant cost Should Jordan continue to make the containers? b. Total avoidable cost Should Jordan continue to make the containers?
Beto Company pays $7.30 per unit to buy a part for one of the products it manufactures. With excess capacity, the company is considering making the part. Making the part would cost $8.40 per unit for direct materials and $1.00 per unit for direct labor. The company normally applies overhead at the predetermined rate of 200% of direct labor cost. Incremental overhead to make the part would be 80% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Beto make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
Ancinas Company produces printers and uses a standard part in the manufacture of several of its printers. The cost of producing 43,000 parts is $280,000, which includes fixed costs of $136,000 and variable costs of $144,000. The company can buy the part from an outside supplier for $5.00 per unit, and avoid 30% of the fixed costs. If Ancinas Company makes the part, how much will its operating income be? $30,200 less than if the company bought the part. $30,200 greater than if the company bought the part. $65,000 greater than if the company bought the part. $65,000 less than if the company bought the part.
Garcia Company sells snowboards. Each snowboard requires direct materials of $105, direct labor of $35, variable overhead of $50, and variable selling, general, and administrative costs of $8. The company has fixed overhead costs of $645,000 and fixed selling, general, and administrative costs of $111,000. It expects to produce and sell 10,500 snowboards. What is the selling price per unit if Garcia uses a markup of 15% of total cost? (Do not round your intermediate calculations. Round your final answer to nearest whole dollar amounts.) Selling price per unit
Kyrie Inc. can make 10,000 banners per month. Kyrie can sell 9,000 banners per month to NBA fans for ₱10 per banner. The company’s costs per banner based on making 10,000 banners are: Prime cost ₱ 5.00 Overhead cost ₱ 3.00 overhead is 2/3 fixed at that volume WBA offers to buy 1,000 banners with special WBA insignias for ₱7 per banner. Printing the special insignias will cost Kyrie ₱200. What is the incremental profit/(loss) associated with this special order? Show solution Group of answer choices ₱ 1,000 ₱ (1,000) ₱ 800 ₱ (800)
Pan Demic, Inc. (PDI) manufactures and sells cast iron skillets. A finished skillet sells for $40 and costs $15 to manufacture. PDI uses one raw material, iron ore, which is buys for $8/pound. Skillet Forgers heat the iron ore and form it into skillets. Forgers are paid $55/hour. Period 1: During the period, PDI purchased $4,000 of Iron Ore. At the end of the period, they had $2,400 of ore left in Raw Materials They used 120 hours of direct labor and incurred $12,000 of Factory Overhead. At the beginning of the period, PDI had $3,000 of costs in WIP and $2,400 of costs in Finished Goods. Prepare the Schedule of Cost of Goods Sold for PDI. Do not use dollar signs. Use whole numbers only (no decimal places) PDI Schedule of Cost of Goods Sold Finished Goods Beginning Inventory Cost of Goods Manufactured Account Cost of Goods Available for Sale Finished Goods Ending Inventory Cost of Goods Sold WIP Inventory Based on your work above, compete the Inventory section of the Balance Sheet as of…
Rooney Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* $ 5,200 6,500 3,600 9,300 26,600 Allocated facility-level costs *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rooney for $2.70 each. Required a. Calculate the total relevant cost. Should Rooney continue to make the containers? b. Rooney could lease the space it currently uses in the manufacturing process. If leasing would produce $11,500 per month, calculate the total avoidable costs. Should Rooney continue to make the containers? a. Total relevant cost Should Rooney continue to make the containers? b. Total avoidable cost Should Rooney continue to make the containers?
Thornton Electronics currently produces the shipping containers It uses to deliver the electronics products It sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 5,100 6,400 3,300 9,900 28,000 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Thornton for $2.60 each. Required a. Calculate the total relevant cost. Should Thornton continue to make the containers? b. Thornton could lease the space it currently uses in the manufacturing process. If leasing would produce $12,100 per month, calculate the total avoidable costs. Should Thornton continue to make the containers? a. Total relevant cost a. Should Thornton continue to make the containers? b. Total avoidable cost b. Should Thornton continue to make the containers?
Al-Rafidain Company produces a fax machine, and the device's manufacturing process is part S, and the company estimates that it is for 100,000 units of the fax machine annually. The company can purchase all its needs of the tooth piece from an external supplier at a price of 9 dinars per piece. The company also estimates that there are additional costs in the case of purchase amounting to one dinar per piece, in exchange for shipping and checking the piece. The company can manufacture the part internally, and the following are the estimated costs of the manufacturing process The quantity that the company needs, amounting to 100,000 pieces total costs 400,000 dinars 200,000 200,000 350,000 1,150,000 dinars cost per piece 4 dinars 2 2 3.5 11.5 dinars direct material direct action Variable indirect industrial costs The share of the industrial costs is fixed the total Assuming that the fixed industrial costs will remain the same in the case of choosing an alternative to purchase from…
Garcia Co. sells snowboards. Each snowboard requires direct materials of $100, direct labor of $30, and variable overhead of $45. The company expects fixed overhead costs of $635,000 and fixed selling and administrative costs of $115,000 for the next year. It expects to produce and sell 10,000 snowboards in the next year. What will be the selling price per unit if Garcia uses a markup of 15% of total cost?
Jordan electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly costs of producing 9,100 containers follow Unit-level material $6,000 Unit-level labor $6,700 unit-level overhead $3,300 product-level costs* $11,700 Allocated facility-level costs $26,500 *one-third of these costs can be avoided by purchasing the containers. Russo container company has offered to sell comparable containers to Jordan for $2.80 each. Required a) Calculate the total relevant cost should Jordan continue to make the containers. b) Jordan could lease the space it currently uses in the manufacturing process if leasing would produce $11,700 per month, and calculate the total avoidable costs. Should Jordan continue to make the containers? a) Total relevant cost should Jordan continue to make the containers? Total avoidable cost Should Jordan continue to make the containers?
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