Conversion Trailer Company plans on selling 5,500 units of a particular trailer model. It can either produce
Question:
Conversion Trailer Company plans on selling 5,500 units of a particular trailer model. It can either produce the product in house or purchase it from an outside supplier. The relevant costs are as follows:
- Purchase from supplier: $625,000
- Direct materials per unit: $60
- Direct labor per unit: $35
- Variable overhead per unit: $15
Prepare a make-or-buy analysis based on the preceding information.
Question 6
Delight Inc. has the capacity to produce 250,000 units of its product.It only plans on producing 175,000 units this year at a price of $17.00 per unit.Ithas fixed costs of $225,000 and typical unit costs as follows:
- Direct materials per unit:$5.00
- Direct labor per unit:$4.00
- Variable overhead per unit:$3.00
- Fixed overhead per unit:$3.00
- Total cost per unit:$15.00
A customer approaches Delight Inc. with an offer to purchase 60,000 units at $9.00 per unit. Create an accept or reject analysis for this offer.
Question
Appliance Company currently has three product lines with the following information:
Basic | Ultra | Superior | |
Sales | $2,000,000 | $1,350,000 | $650,000 |
Variable Expenses | $1,200,000 | $600,000 | $450,000 |
Direct Fixed Expenses | $100,000 | $125,000 | $275,000 |
Appliance Company will also lose $500,000 in sales of the Ultra Brand (and $250,000 of variable expenses), ifit drops the Superior Brand. Prepare a keep or drop analysis for the Superior Brand.
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ