2 1 points Futura Company purchases 66,000 starters from a supplier at $11.40 per unit that...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
2 1 points Futura Company purchases 66,000 starters from a supplier at $11.40 per unit that it installs in farm tractors. Due to a reduction in output, the company now has enough idle capacity to produce the starters rather than buying them from the supplier. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $11.30, as shown below Direct materials Fee Unit $6.00 Total Skipped Direct labor 2.00 Supervision 1.60 $ 105,600 Depreciation 1.00 $ 66,000 Variable manufacturing overhead 0.40 Rent Total product cost 0.30 $11.30 $19,800 ebook Pet References If Futura decides to make the starters, a supervisor would be hired (at a salary of $105,600) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $89,000 per period Required: What is the financial advantage (disadvantage) of making the 66,000 starters instead of buying them from an outside supplier? financial advantage Financial (disadvantage) 2 1 points Futura Company purchases 66,000 starters from a supplier at $11.40 per unit that it installs in farm tractors. Due to a reduction in output, the company now has enough idle capacity to produce the starters rather than buying them from the supplier. However, the company's chief engineer is opposed to making the starters because the production cost per unit is $11.30, as shown below Direct materials Fee Unit $6.00 Total Skipped Direct labor 2.00 Supervision 1.60 $ 105,600 Depreciation 1.00 $ 66,000 Variable manufacturing overhead 0.40 Rent Total product cost 0.30 $11.30 $19,800 ebook Pet References If Futura decides to make the starters, a supervisor would be hired (at a salary of $105,600) to oversee production. However, the company has sufficient idle tools and machinery such that no new equipment would have to be purchased. The rent charge above is based on space utilized in the plant. The total rent on the plant is $89,000 per period Required: What is the financial advantage (disadvantage) of making the 66,000 starters instead of buying them from an outside supplier? financial advantage Financial (disadvantage)
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
Upon graduation from high school, John Abel immediately accepted a job as an electrician's assistant for a large local electrical repair company. After three years of hard work, John received an...
-
EDGAR, the Electronic Data Gathering, Analysis, and Retrieval system, performs automated collection, validation, indexing, and forwarding of submissions by companies and others who are required by...
-
Establish the identity. sin 2 (1 + cot 2 ) = 1
-
Haupt Consulting began January with \($10,000\) cash. Management forecasts that collections from credit customers will be \($50,000\) in January and \($53,500\) in February. Projected cash payments...
-
Kenmare Architects Ltd. (KAL) was incorporated and commenced operations on January 1, 2014. Sheila Kenmare, the company's only employee, consults with various clients and uses expensive equipment to...
-
Test the hypothesis that the average below ground biomass is less than 4.15 grams. Include hypotheses, conclusion and interpretation
-
Determine the available strength of a 7 x in. A36 plate with two lines of A325-N 7/8 in. bolts. Consider yielding, not section rupture, and block shear failures. (20 pts.) P L & 1 -6 6. --G 1.5" 3"
-
Where are the boundaries of an organization's value statement? Should it look for these values in itself, its immediate business partners, and/or the partners of its partners?
-
In a vision statement, an organization carefully describes its desires concerning what?
-
What is the relationship between planning and decision making? Do these two activities always occur simultaneously? Does one depend upon the other?
-
Why would high productivity not necessarily guarantee competitiveness?
-
If a product is produced in high volume by a few large organizations, what phase of the product life cycle is it most likely in?
-
Design a 1-m-long cylindrical wind tunnel whose diameter is 25 cm operating at a Mach number of 1.8. Atmospheric air enters the wind tunnel through a converging diverging nozzle where it is...
-
Suppose that the laptop of Prob. 2.16 is placed in an insulating briefcase with a fully charged battery, but it does not go into sleep mode, and the battery discharges as if the laptop were in use....
Study smarter with the SolutionInn App