EBK MANAGERIAL ACCOUNTING
EBK MANAGERIAL ACCOUNTING
5th Edition
ISBN: 8220103613811
Author: TIETZ
Publisher: PEARSON
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Chapter 13, Problem 13.45ACT
To determine

To explain: The observation about the given companies regarding the stock purchase recommendation and the stock which appears to be better after looking at the cash flows.

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General Accounting
Financial Accounting Question
Florida Kitchens produces high-end cooking ranges. The costs to manufacture and market the ranges at the company’s volume of 3,000 units per quarter are shown in the following table:   Unit manufacturing costs     Variable costs $ 1,440   Fixed overhead 720   Total unit manufacturing costs   $ 2,160 Unit nonmanufacturing costs     Variable 360   Fixed 840   Total unit nonmanufacturing costs   1,200 Total unit costs   $ 3,360   The company has the capacity to produce 3,000 units per quarter and always operates at full capacity. The ranges sell for $4,000 per unit.   Required: a. Florida Kitchens receives a proposal from an outside contractor, Burns Electric, who will manufacture 1,200 of the 3,000 ranges per quarter and ship them directly to Florida’s customers as orders are received from the sales office at Florida. Florida would provide the materials for the ranges, but Burns would assemble, box, and ship the ranges. The variable manufacturing costs would be…

Chapter 13 Solutions

EBK MANAGERIAL ACCOUNTING

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