Marlboro Company recently discontinued the manufacture of product J15. The standard costs for this product were:...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Marlboro Company recently discontinued the manufacture of product J15. The standard costs for this product were: Direct material Direct labor Variable overhead Fixed overhead Total $ 50 20 14 35 $119 There are 800 units of this product in the finished-goods inventory. The units are technologically obsolete, and the following alternatives are being considered: 1. Dispose of as scrap. The proceeds from the sale will equal the cost of transportation to the disposal site. 2. Sell to an exporter for sale in a developing country. The sales price to the exporter would be $12 per unit. 3. Remanufacture the products to convert them into model J16, a model that normally sells for $200. The additional cost to convert the J15 units would be $45; the standard cost to manufacture J16 is $125. Presently, there is sufficient capacity to manufacture product 316 directly or to do the conversion necessary work on J15. Requirements: a. Determine the current carrying value of the J15 inventory. b. Evaluate each alternative and determine the financial benefit to Marlboro if the alternative is pursued. Marlboro Company recently discontinued the manufacture of product J15. The standard costs for this product were: Direct material Direct labor Variable overhead Fixed overhead Total $ 50 20 14 35 $119 There are 800 units of this product in the finished-goods inventory. The units are technologically obsolete, and the following alternatives are being considered: 1. Dispose of as scrap. The proceeds from the sale will equal the cost of transportation to the disposal site. 2. Sell to an exporter for sale in a developing country. The sales price to the exporter would be $12 per unit. 3. Remanufacture the products to convert them into model J16, a model that normally sells for $200. The additional cost to convert the J15 units would be $45; the standard cost to manufacture J16 is $125. Presently, there is sufficient capacity to manufacture product 316 directly or to do the conversion necessary work on J15. Requirements: a. Determine the current carrying value of the J15 inventory. b. Evaluate each alternative and determine the financial benefit to Marlboro if the alternative is pursued.
Expert Answer:
Answer rating: 100% (QA)
a Carrying value of J15 inventory 800 units x 119 standard cost per unit 95200 ... View the full answer
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
Posted Date:
Students also viewed these accounting questions
-
Who wins and who loses in corporate takeovers? Why does acquiring firm shareholders generally lose in stock- swap mergers but either benefit or at least break even in acquisitions paid for with cash?
-
In an election debate, two candidates for governor are debating about whether to raise the general sales tax from 5 to 7 percent. One argues that this would increase tax revenues, enabling the state...
-
In Figure particles 1 and 2 are fixed in place on an x axis, at a separation of L = 8.00cm. Their charges are q1 = + e and q2 = ?? 27e.Particle 3 with charge q3 = + 4e is to be placed on the line...
-
Suppose you have a subject property with a 105,000 sq. ft. lot and existing improvements for which you estimate the reproduction cost new to be $2,500,000, physical deterioration to be $400,000,...
-
A reaction of the form aA Products is second order with a half-life of 307 s. What is the rate constant of the reaction if the initial concentration of A is 1.87 1002 mol/L?
-
A 120-metric-ton telescoping crane that cost $320,000 is owned by Upper State Power. Salvage is estimated at $75,000. (a) Compare book values for MACRS and standard SL depreciation over a 7-year...
-
Harold Fail owned a plot of land in Georgia known as Ebenezer Landing, where he operated a public boat ramp and parking lot. In 1999, Fail and Steve Bodiford entered into an oral agreement...
-
Radovilsky Manufacturing Company, in Hayward, California, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 12,000 flashing...
-
When President Obama was President he had discussed raising income taxes for individuals earning over $250,000 in income. Explain how these higher income taxes will affect the aggregate demand curve....
-
CableTech Bell Corporation (CTB) operates in the telecommunications industry. CTB has two divisions: the Phone Division and the Cable Service Division. The Phone Division manufactures telephones in...
-
Marilyn owns 100% of the stock of Lilac, Inc., with an adjusted basis of $45,000. She receives a cash distribution of $160,000 from Lilac when its earnings and profits are $90,000. a. b. C. What is...
-
The foundation of international space law is the Convention on International Liability for Damage Caused by Space Objects. (True/False)
-
A contract between Moss Energy, a U.S. firm, and Electronique, S.A., a French company, provides that disputes between the parties will be adjudicated in a specific British court. This clause is a. a...
-
A survey indicated that chocolate is the most popular flavor of ice cream in America. For each of the following, indicate the possible effects on demand, supply, or both as well as equilibrium price...
-
A South African seller and a U.S. buyer form a contract, which the buyer later breaches. The seller sues in a South African court and wins damages, but the buyers assets are in the United States. If...
-
Johnston International, a U.S. firm, signs a contract with Irkut, Ltd., a Russian company, to give Irkut the right to sell Johnstons products in Russia. This is a. a distribution agreement. b. a...
-
What is the name of your country? b) What form of government does it operate under? c) What was its ranking on the World Press Freedom Index? d) Thinking about the model of communication, briefly...
-
7. FALSE DILEMMA 8. GANDWAGON Definition: Fallacy example: How to revise argument: Definition: Fallacy example: How to revise argument:
-
Revenues are normally considered to have been earned when a. All possibility of return has expired. b. The company has substantially accomplished what it must to be entitled to the benefits. c. The...
-
What procedures do auditors perform to identify subsequent events?
-
In the audit of investment securities, auditors develop specific audit assertions related to the investments. They then design specific substantive procedures to obtain evidence about each of these...
-
At the start of each day, the condition of a machine is classified as either excellent, acceptable, or poor. The daily behavior of the machine is modeled as a three-state absorbing unichain with the...
-
A consumer electronics retailer can place orders for flat panel TVs at the beginning of each day. All orders are delivered immediately. Every time an order is placed for one or more TVs, the retailer...
-
Suppose that the condition of a machine can be described by one of the following three states: The daily behavior of the machine when it is left alone for 1 day is modeled as an absorbing unichain...
Study smarter with the SolutionInn App