5 1 points Print Problem: Module 6 Textbook Problem 5 Learning Objective: 6-3 Make appropriate outsourcing decisions Rundle Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (13,900 Units × $29) Labor (13,900 Units x $29) Depreciation on manufacturing equipment* Salary of supervisor of engine production Rental cost of equipment used to make engines Allocated portion of corporate-level facility-sustaining costs Total cost to make 13,900 engines $ 403, 100 403, 100 a. Maximum price per unit b. Maximum price per unit 27,000 78,000 12,000 72,000 $995, 200 *The equipment has a book value of $98,000 but its market value is zero. Required a. Determine the maximum price per unit that Rundle would be willing to pay for the engines. b. Determine the maximum price per unit that Rundle would be willing to pay for the engines, if production increased to 18,150 units. (For all requirements, Round your answers to 2 decimal places.)
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- Problem: Module 6 Textbook Problem 6 Learning Objective: 6-3 Make appropriate outsourcing decisions Benson Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,400 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 6,600 6,300 4,000 9,900 26,400 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Benson for $2.80 each. Required a. Calculate the total relevant cost. Should Benson continue to make the containers? b. Benson could lease the space it currently uses in the manufacturing process. If leasing would produce $12,400 per month, calculate the total avoidable costs. Should Benson continue to make the containers? a. Total relevant cost Should Benson continue to make the containers? b. Total avoidable cost Should Benson continue to…W NWP Assessment Player UI Application W NWP Assessment - 1023.121103 BFN-C201-1023-... th Solution Walkthrough Videos Question 3 of 7 -/0.75 View Policies Current Attempt in Progress You are trying to choose between purchasing one of two machines for a factory. Machine A costs $15,400 to purchase and has a three-year life. Machine B costs $17,500 to purchase but has a four year life. Regardless of which machine you purchase, it will have to be replaced at the end of its operating life. Assume a marginal tax rate of 35 percent and a discount rate of 13 percent. Calculate the equivalent annual costs (EAC) of each machines. (Do not round intermediate calculations. Round answers to 2 decimal places, e.g. 15.27.) Equivalent Annual Cost (EAC) of machine A $4 Equivalent Annual Cost (EAC) of machine B $4 Which machine should you choose? You should choose eTextbook and Media Save for Later Attempts: 0 of 3 used Submit AnswerExercise 6-11A (Static) Establishing price for an outsourcing decision LO 6-3 Levesque Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (20,000 units × $26) Labor (20,000 units × $20) Depreciation on manufacturing equipment* Salary of supervisor of engine production Rental cost of equipment used to make engines Allocated portion of corporate-level facility-sustaining costs Total cost to make 20,000 engines *The equipment has a book value of $90,000 but its market value is zero. Required a. Determine the maximum price per unit that Levesque would be willing to pay for the engines. b. Determine the maximum price per unit that Levesque would be willing to pay for the engines, if production increased to 24,000 units. Note: For all requirements, round intermediate and final answers to 2 decimal places. a. Maximum…
- sions Question 1 rences View Policies porations Current Attempt in Progress PLUS Support Bonita's Manufacturing Company can make 100 units of a Central necessary component part with the following costs: e 365 $119000 Direct Materials 24000 Direct Labor ges 53000 Variable Overhead za 30000 Fixed Overhead If Bonita's Manufacturing Company can purchase the component externally for $195000 and only $6000 of the fixed costs can be avoided, what is the correct make-or-buy decision? O Make and save $7000 O Make and save $22000 Buy and save $7000 OBuy and save $22000 ip-/1 Question 12 View Policies Current Attempt in Progress Thomsen Computer Company produces three products: Earth, Wind, and Fire. Earth requires 80 machine setups, Wind requires 60 setups, and Fire requires 180 setups. Thomsen has identified an activity cost pool with allocated overhead of $1500000 for which the cost driver is machine setups. How much overhead is assigned to each product? Fire Wind Earth $843750 $281250 $375000 $234375 $703125 $312500 $500000 $500000 $500000 $281250 $500000 $718750b Preview File Edit View Go Tools Window Help ♥ mgt120h-a17.pdf Page 4 of 10 12. Units of production is an appropriate depreciation method to use when a. It is impossible to determine the productivity of the asset. b. The asset's use will be constant over its useful life. Cost-Volume-Profit Analysis 40 c. The productivity of the asset varies significantly from one period to another. d. The company is a manufacturing company. The Effect Of Prepaid Taxes On Assets And Liabili... O D Debenture Valuation V 13. Goodwill can be recorded a. When customers keep returning because they are satisfied with the company's products. b. When the company acquires a good location for its business. c. When the company has exceptional management. d. Only when there is an exchange transaction involving the purchase of an entire business. CC 7 ↑ Search (Cª Ơ Sat Apr 15 3:05 PM Page 4 of 11 11. Corporations generally issue stock dividends in order to a. Increase the market price per share b. Exceed…
- Homwork Question 6 MSI is considering outsourcing the production of the handheld control module used with some of its products. The company has received a bid from Monte Legend Co. (MLC) to produce 10,000 units of the module per year for $16 each. The following information pertains to MSI’s production of the control modules: Direct materials $9Direct labor $4Variable manufacturing overhead $2Fixed manufacturing overhead $3Total cost per unit $18 MSI has determined that it could eliminate all variable costs if the control modules were produced externally, but none of the fixed overhead is avoidable. At this time, MSI has no specific use in mind for the space that is currently dedicated to the control module production. 1. Compute the difference in cost between making and buying the control module.Task 2: CLO4 OBJECTIVE: To enable learners to identify the relevant costs and benefits from costs and revenue information available in the financial database to aid decision making on time. REQUIREMENT: Short term decision making Question Selma Corporation uses Part PB7 in one of its products. The company's Accounting Department reports the following costs to produce 7,000 units of the PB7 that are needed every year. $ per unit Direct materials 7.00 Direct labour 6.00 Variable overhead 5.60 Supervisor's salary Depreciation of special equipment Allocated general overhead 4.70 1.50 5.40 An outside supplier has offered to make the part and sell it to the company for $28.30 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If…Question 4 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021. R R Unit selling price 160 Less: Direct materials 50 Direct labour 30 Fixed Overheads: Admin 4.00 Rent 7.50 Rates…
- Question Content Area A used machine with a purchase price of $36,814, requiring an overhaul costing $9,591, installation costs of $6,837, and special acquisition fees of $34,674, would have a cost basis of a.$139,018 b.$87,916 c.$36,814 d.$46,405#becausesneakers... HW CH 25 Supplies Office expenses Office depreciation Computer depreciation. Total Make-or-Buy Decision for a Service Company The Theater Arts Guild of Dallas (TAG-D) employs 5 people in its Publication Department. These people lay out pages for pamphlets, brochures, magazines, and other publications for the TAG-D productions. The pages are delivered to an outside company for printing. The company is considering an outside publication service for the layout work. The outside service is quoting a price of $22 per layout page. The budget for the Publication Department for the current year is as follows: Salaries Benefits eBook $319,400 72,600 Unit costs: Purchase price of lay out work $ Salaries Benefits Supplies Office expenses Office depreciation Computer depreciation Total unit costs Custom Order 38,700 48,400 43,600 29,000 $551,700 > The department expects to lay out 22,000 pages for the current year. The Publication Department office space and equipment would be…Learning Material Relevant Cost Part 1 Practice Problem Direction: Identify whether the following costs are relevant or irrelevant: _1. Research and development costs incurred in the prior months 2. Contribution margin of the decrease in regular sales for accepting a special order 3. Alternative usage of plant space (rentals to others for a fee, production of new products, etc.) 4. Cost of inventory acquired several years ago. 5. Joint production costs incurred _6. Depreciation of equipment used in production _7. Salary of a manager of a product line that is being considered to be dropped. 8. Rental costs of additional space for the production of a new product _9. Cost of special device that is necessary if a special order is accepted. 10. Direct materials, direct labor and variable overhead incurred on units produced last period 11. Further processing costs 12. Allocated main office expenses to different departments 13. Prime costs of units ordered by one-time customers 14. Current…