Refer to the facts in Exercise 11-22. Warren estimates that the variable costs in the Maintenance Department

Question:

Refer to the facts in Exercise 11-22. Warren estimates that the variable costs in the Maintenance Department total $145,000, and in the Cafeteria variable costs total $160,000. Avoidable fixed costs in the Maintenance Department are $90,000.

Required

If Warren outsources the Maintenance Department, what is the maximum they can pay an outside vendor without increasing total costs?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Cost Accounting

ISBN: 978-0077398194

3rd Edition

Authors: William Lanen, Shannon Anderson, Michael Maher

See More Books

Question Posted: Apr 26, 2012 02:40 AM

See More Questions

Refer to the facts in Exercise 11-24. University Printers estimates that the variable costs in the Personnel Department total $20,000 and in the Maintenance Department variable costs total $8,750....
Refer to the facts in Exercise 4-41. Mel suddenly finds an opportunity to sell boxed dinners. The new opportunity would require the use of the 30 percent unused capacity. The contribution margin from...
Refer to the facts in the preceding problem but assume that Aldos basis in the investment land was $100,000 rather than $61,000. a. Compute Aldos recognized loss in year 1. b. In year 4, Aldo pledged...
Suppose that a telephone switchboard of some company on the average handles 300 calls per hour, and that the board can make at most 10 connections per minute. Using the Poisson distribution, estimate...
The following errors in the accounting records of the Chipp & Simon Partnership were discovered on January 10, 2013. The partners share net income and losses as follows: 65%, Chipp; 35%, Simon. 1....
The rat trap shown in the figure uses two opposite-image torsion springs. The wire has a diameter of 0.081 in, and the outside diameter of the spring in the position shown is in. Each spring has 11...
Chemical vapor deposition (CVD) on an inclined susceptor: a case-study problem. An important application of convective mass transfer theory is in CVD processes employed to coat surfaces with thin...
Leah Sanchez is concerned that if she orders too few calendars, customers disappointment in not finding a calendar might drive them to shop elsewhere, resulting in more of a loss over the long term...
Explain the trading techniques that can be used with options and financial futures contracts and note how these securities can be used in conjunction with common stock, or bond investments
Convert 1250 millimeters to meters.
Refer to Exercises 11-24, 11-26, and 11-29 (University Printers). Required a. Which method do you think is best? b. How much would it be worth to the company to use the best method compared to the...
A company processes a patented chemical, D-12, and produces two outputs, C-30 and C-40. In March, the costs to process D-12 are $450,000 for materials and $900,000 for conversion costs. C-30 has a...
Does a wire connected to the terminals of a battery emit electromagnetic waves? Explain.
Assume there are 10 equally sized hospitals in a market area. 1. Calculate the HHI. 2. Consider the case where two hospitals in the market area inform the Department of Justice (DOJ) that they wish...
Both Austin and Jasmine purchased items on account thru Mason Landscaping. Austin will pay its account within 30 days. Jasmine signed a written promise to pay within 90 days with a 1% monthly...
What figure is arrived at when the totals from each section of the statement of cash flows are added together?
The income statement provided by employees of Walters Corporation exhibits several weaknesses in classification and disclosure. Let's discuss these weaknesses and suggest improvements in accordance...
Jacob and Susan Merritt are going to start a family limited partnership for the benefit of their children. They are going to meet with an attorney to discuss the implications and requirements of the...
SAN A/S,1 a company incorporated in Denmark, manufactures electric heating products for the industrial market. The company was founded in 1950 and was involved in a limited way in the production of...
You are interested in investing and are considering a portfolio comprised of the following two stocks. Their estimated returns under varying market conditions are provided: (note: it is difficult to...
A seed manufacturer sells seeds in packets of 50. Assume that each seed germinates with probability 0.99 independently of all the others. The manufacturer promises to replace, at no cost to the...
Our cash budget shows a surplus for the quarter, so we do not have to think about arranging any bank financing. Comment on this statement.
The Casings Plant of Wyoming Machines makes plastics shells for the companys calculators. (Each calculator requires one shell.) For each of the next two years, Wyoming expects to sell 160,000...
Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes...
Prob. 1(a). Consider a stock currently trading at $40.25. For a strike price of $38, you want to price both a call and put option that matures 90 days from now. The volatility of the stock (2) is...
Wildhorse sells a snowboard, WhiteOut, that is popular with snowboard enthusiasts. Presented below is information relating to Wildhorse's purchases of WhiteOut snowboards during September. During the...
The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses:...

Refer to the facts in Exercise 11-22. Warren estimates that the variable costs in the Maintenance Department

Question:

Step by Step Answer:

To determine the avoidable cost first determine the variable cost including th...View the full answer

Fundamentals of Cost Accounting

Students also viewed these Cost Accounting questions