Xia Co. currently buys a component part for $5 per unit. Xia believes that making the part would require $2.25 per unit of direct materials and $1.00 per unit of direct labor. Xia allocates overhead using a predetermined overhead rate of 200% of direct labor cost. Xia estimates an incremental overhead rate of $0.75 per unit to make the part. Should Xia make or buy the part?
Answer to relevant Questionsa. Accounting professionals must sometimes choose between two or more acceptable methods of accounting for business transactions and events. Explain why these situations can involve difficult matters of ethical concern. b. ...Signal mistakenly produced 1,000 defective cell phones. The phones cost $60 each to produce. A salvage company will buy the defective phones as they are for $30 each. It would cost Signal $80 per phone to rework the phones. ...Refer to the information in Exercise and assume instead that double-declining depreciation is applied. Compute the machine’s payback period (ignore taxes). (Round the payback period to three decimals.) In exercise A ...Access Samsung’s 2013 Corporate Sustainability Report, from its website www.samsung.com. Identify and read the section “Social Responsibility: Making Contributions Around the Globe.” Required Samsung’s 2013 Corporate ...Tom Thompson expects to invest $10,000 at 12% and, at the end of a certain period, receive $96,463. How many years will it be before Thompson receives the payment?
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