Greene Corporation manufactures a drink bottle, model CL24. During 2020, Greene produced 210,000 bottles at a...
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Greene Corporation manufactures a drink bottle, model CL24. During 2020, Greene produced 210,000 bottles at a total cost of $651,000. Parker Corporation has offered to supply as many bottles as Greene wants at a cost of $3.00 per bottle. Greene anticipates needing 224,000 bottles each year for the next few years. Read the reauirements. Requirement 1a. What is the average cost of manufacturing a drink bottle in 2020? How does it compare to Parker's offer? The average cost of per bottle is than Parker's offer. Requirements 1. a. What is the average cost of manufacturing a drink bottle in 2020? How does it compare to Parker's offer? b. Can Greene use the answer in requirement 1a to determine the cost of manufacturing 224,000 drink bottles? Explain. 2. Greene's cost analyst uses annual data from past years to estimate the following regression equation with total manufacturing costs of the drink bottle as the dependent variable and drink bottles produced as the independent variable: y = $439,000 + $2.00X During the years used to estimate the regression equation, the production of drink bottles varied from 200,000 to 234,000. Using this equation, estimate how much it would cost Greene to manufacture 224,000 drink bottles. How much more or less costly is it to manufacture the bottles rather than to acquire them from Parker? 3. What other information would you need to be confident that the equation in requirement 2 accurately predicts the cost of manufacturing drink bottles? Print Done Greene Corporation manufactures a drink bottle, model CL24. During 2020, Greene produced 210,000 bottles at a total cost of $651,000. Parker Corporation has offered to supply as many bottles as Greene wants at a cost of $3.00 per bottle. Greene anticipates needing 224,000 bottles each year for the next few years. Read the reauirements. Requirement 1a. What is the average cost of manufacturing a drink bottle in 2020? How does it compare to Parker's offer? The average cost of per bottle is than Parker's offer. Requirements 1. a. What is the average cost of manufacturing a drink bottle in 2020? How does it compare to Parker's offer? b. Can Greene use the answer in requirement 1a to determine the cost of manufacturing 224,000 drink bottles? Explain. 2. Greene's cost analyst uses annual data from past years to estimate the following regression equation with total manufacturing costs of the drink bottle as the dependent variable and drink bottles produced as the independent variable: y = $439,000 + $2.00X During the years used to estimate the regression equation, the production of drink bottles varied from 200,000 to 234,000. Using this equation, estimate how much it would cost Greene to manufacture 224,000 drink bottles. How much more or less costly is it to manufacture the bottles rather than to acquire them from Parker? 3. What other information would you need to be confident that the equation in requirement 2 accurately predicts the cost of manufacturing drink bottles? Print Done
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Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan
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