Beto Company pays $4.10 per unit to buy a part for one of the products it...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Beto Company pays $4.10 per unit to buy a part for one of the products it manufactures. With excess capacity, the company is considering making the part. Making the part would cost $3.60 per unit for direct materials and $1.00 per unit for direct labor. The company normally applies overhead at the predetermined rate of 200% of direct labor cost. Incremental overhead to make the part would be 80% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Beto make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy Beto Company pays $4.10 per unit to buy a part for one of the products it manufactures. With excess capacity, the company is considering making the part. Making the part would cost $3.60 per unit for direct materials and $1.00 per unit for direct labor. The company normally applies overhead at the predetermined rate of 200% of direct labor cost. Incremental overhead to make the part would be 80% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Beto make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
For a corporation such as Bell Canada, what are the two primary advantages of equity financing? Ownership is spread among many individuals, and no interest payments are required. Investors pay top...
-
What is meant by a business strategy?
-
Write the part program to drill the holes in the part shown in Figure P7.26. The part is 12.0 mm thick. Cutting speed = 100 m/min and feed = 0.06 mm/rev. Use the lower left corner of the part as the...
-
We are separating methanol and water in a staged distillation column at total reflux to determine Murphree efficiency. Pressure is \(101.3 \mathrm{kPa}\). The column has a 2.0 -in. head of liquid on...
-
1. Describe how the various historical restricted stock studies were used by the appraiser to estimate the liquidity discount. 2. What other factors could the appraiser have used to estimate the...
-
all your necessary a 5. (20p) (PC 2) The flow rate of water in an open-top channel can be estimated by placing a semi-circular obstacle on the bottom and measuring the depression height d, as shown...
-
Please determine the synchronous speed of an eight-pole generator in U.S. If a three-phase induction motor also has eight-pole, and its speed is 880, what is its slip? This induction motor has 36...
-
Sales 1,275,000 Depreciation, factory 79,050 Utilities, factory 19,635 Administrative expense 144,330 Purchase of raw materials 368,730 Raw materials, Mar31, 2020 41,820 selling expense 84,150 Raw...
-
rewrite this "E(r) = y * E(r) + (1 - y) * rpfE(r) = 75% * 7.1% + 25% * 0.9% = 5.55%Standard Deviation = 75% *= 75% * 16.4% = 12.3%
-
PT ABC purchased new equipment that will be used to make computer processors. in the first year of operation of its new equipment, PT ABC will sell 1 billion worth of chips, with a gross profit...
-
A company is considering an investment in a new product with a 10-year horizon (product will be sold for 10 years). The upfront investment is $5 million and it is assumed to depreciate on a...
-
6: What is a superannuation guarantee charge (not to be confused with just the Superannuation Guarantee)? Hint: Search ATO website for "superannuation guarantee charge
-
Becca Harris works for Shallow Inc. in Lethbridge, Alberta. Becca is going to receive a $6,000.00 performance bonus on her next pay for meeting her previous year objectives. The bonus is the first...
-
As long as we can't lose any money, we have a risk-free investment." Discuss this comment. Q2: Both investing and gambling can be defined as "undertaking risk in order to earn a profit." Explain how...
-
Why would a founder decide to form a membership organization rather than choosing a self - perpetuating board? When might this structure be essential? When might it be an unnecessary challenge?
-
A constructive partnership between the chair and the chief executive is vital to every nonprofit. Why is this true or does it always matter?
-
For the most part, chairs change regularly, but the chief executive stays in place for a longer period of time. How can this situation affect the dynamics of the two positions?
Study smarter with the SolutionInn App