Experts Ltd., produce many different heating and air-conditioning systems. The company currently manufactures all of its...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Experts Ltd., produce many different heating and air-conditioning systems. The company currently manufactures all of its own component parts. An outside supplier has offered to sell a thermostat to the firm for $20 per unit. The company has gathered the following internal data relating to its own cost of producing the thermostat: Direct Materials.. Direct Labour ****** Variable Manufacturing Overhead... Fixed Manufacturing Overhead Per Unit Costs $ S Total Cost S Fixed Manufacturing Overhead consists of: Direct Fixed Cost: Thermostat Division Supervisor Salaries...... Allocated Common Cost: Manufacturing Equipment Cost....... 6 8 1 15 30 $ 13 $ 15 15,000 units produced and used per year 90,000 $ S S S S $ S 120,000 15,000 225,000 450,000 75,000 150,000 225,000 Required: 1. Assume the company has no alternative use for the manufacturing equipment used to produce the thermostats. Should the supplier's offer be accepted? Show all calculations on a per-unit and total basis to support your answer. Discuss why you have included and/or excluded each of the costs in your analysis. (8 marks) Experts Ltd., produce many different heating and air-conditioning systems. The company currently manufactures all of its own component parts. An outside supplier has offered to sell a thermostat to the firm for $20 per unit. The company has gathered the following internal data relating to its own cost of producing the thermostat: Direct Materials.. Direct Labour ****** Variable Manufacturing Overhead... Fixed Manufacturing Overhead Per Unit Costs $ S Total Cost S Fixed Manufacturing Overhead consists of: Direct Fixed Cost: Thermostat Division Supervisor Salaries...... Allocated Common Cost: Manufacturing Equipment Cost....... 6 8 1 15 30 $ 13 $ 15 15,000 units produced and used per year 90,000 $ S S S S $ S 120,000 15,000 225,000 450,000 75,000 150,000 225,000 Required: 1. Assume the company has no alternative use for the manufacturing equipment used to produce the thermostats. Should the supplier's offer be accepted? Show all calculations on a per-unit and total basis to support your answer. Discuss why you have included and/or excluded each of the costs in your analysis. (8 marks)
Expert Answer:
Answer rating: 100% (QA)
The question seems to be regarding whether Experts Ltd should accept an outside suppliers offer to sell a thermostat to the company for 20 per unit co... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
Students also viewed these accounting questions
-
Climate-Control, Inc., manufactures a variety of heating and air-conditioning units. The company is currently manufacturing all of its own component parts. An outside supplier has offered to sell a...
-
Alanco, Inc. manufactures a variety of products and is currently manufacturing all of its own component parts. An outside supplier has offered to sell one of those components to Alanco. The...
-
1. Consider the function 2xy (x, y) + (0,0) f(x,y)%3D (x,y) 3D(0,0) (a) Use a computer to draw a contour diagram for f. Which of the following is the contour diagram? figure 1 figure 2 figure 3 ...
-
What are the explanations given for slow progress towards full acceptance of ISAs?
-
Complete the electron-dot structure of caffeine, showing all lone-pair electrons, and identify the hybridization of the indicatedatoms. CH H3C. -- Caffeine 0= C
-
Total rental cost in dollars for a power washer, where x represents the number of hours with x > 0, can be represented by the function Find the cost of a 7 1/2-hr rental. f(x) = 12[x] + 25.
-
In your opinion, what are the critical success factors of CM?
-
Presented below is information for Bach Company for the month of March 2014. Instructions (a) Prepare a multiple-step income statement. (b) Compute the gross profitrate. Cost of goods sold...
-
Critically consider the way social policy debates and changes to the Australian welfare state have affected a particular population group. Your discussion must be supported by reading and research...
-
As of January 1, 2012, the trial balance for Haven Hospital was as follows: During the fiscal year ended December 31, 2012, the following transactions occurred: 1. Patient service revenue amounted to...
-
A rectangular specimen of an alloy (150 mm x 200 mm) has been subjected to cold working treatment to increase its strength. The dimensions of the specimen after deformation became (100 mm x L mm). i....
-
When tasked with ventilation a fire fighter has numerous considerations to take into account before performing the task. List and defend 5 considerations that you take into account if and when...
-
How do developmental perspectives on emotional intelligence, grounded in attachment theory, social learning theory, and socioemotional development frameworks, illuminate the early childhood roots of...
-
Illustrate using examples of project management scenarios, the importance of the constraints of risk, quality, scope, time, cost, and resources on the final project schedule. Make reference to Tools...
-
After carefully reading The Great Inventory Correction case beginning on page 187 of the Simchi-Levi, et. al (2022) text and performing a thorough review of relevant literature, you will be assuming...
-
Consider the function U (p,b) = 2ln (p) + In (b) (a) Find the unconstrained maximum of the function (b) Now, suppose that the maximization is subject to the constraint 2p+36=24. What is the...
-
Conduct some research on Emotional Intelligence and how it is being used in the workplace. Write a research paper in which you answer the following: a. What does Emotional Intelligence represent for...
-
After graduating from college and working a few years at a small technology firm. Preet scored a high-level job in the logistics department at Amex Corporation. Amex sells high-quality electronic...
-
If employees are chronically unable to meet a standard, what effect would you expect this to have on their productivity?
-
Topper Toys has developed a new toy called the Brainbuster. The company has a standard cost system to help control costs and has established the following standards for the Brainbuster toy: Direct...
-
Crydon, Inc., manufactures an advanced swim fi n for scuba divers. Management is now preparing detailed budgets for the third quarter, July through September, and has assembled the following...
-
List eight environmental quality control elements audit firms should implement to help ensure that high quality audits are performed by the firm.
-
Describe briefly the key features of the Joint Monitoring Unit's monitoring process.
-
List six factors of the law relating to the liability of auditors to third parties that have emerged from cases settled subsequent to the Caparo decision, and identify the common theme that can be...
Study smarter with the SolutionInn App