Question: please help under exam condition That ald oqupment for producing gears is constantly breaking down. It's worn out, smit William Jones, president of Cogss Company.

please help under exam condition  please help under exam condition "That ald oqupment for producing gears
is constantly breaking down. It's worn out," smit William Jones, president of

"That ald oqupment for producing gears is constantly breaking down. It's worn out," smit William Jones, president of Cogss Company. "We need to make a decision quickly." The company is trying to decide whecther it ahould reat new equipment and continue to make its gears internally or whether it ithould discontinue: production of its genrs and purchase them from an outside supplier. The altematives follow: Altarnative 1: Rent new equipment to produce the gears for $198,000 per year. Alternative 2: Purchase gears from an outside supplier for $19.00 each. Cogs Company's costs per unit of producing the gears internally (with the old equipment) are given below. These costs are based on a current activity level of 30,000 units per year: The new equipment has a maximum capacity of producing 50,000 gears per year and would be cost efficient by reducing respectively 25% of direct labour costs and variable overhead costs. Direct material costs or depreciation would be the same when using the new equipment. The yearly $99,000 supervision cost would not be needed if the gears were purchased. The total general company overhead of $120,000 would be unaffected by this decision. Required: Prepare a per-unit analysis showing the relevant costs for each of the two alternatives given above. Assume hat 30,000 gears are needed each year. Which course of action would you recommend to the president? Quespon 3 (part 2 of 2) Dita concering the unit selling prices and unit costs of the 3 products produced by Redding Inc. appear belo Fixed costs are applied to the products on the basis of direct labour hours. Demand for each of the three products exceeds the company's production capacity. The grinding machine is the constraint, with only 2,4 minutes of grinding machine time available this week. Required: If there is still unfilled demand for the product that the company should emphasize the most, up to how m should the company be willing to pay for an additional hour of grinding machine time in order to meet th week's demand? Show calculations clearly

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