Question: The variable cost (material and labor) required to assemble a children's toy in-house is $0.60/unit. The fixed overhead cost of operating an assembly line

The variable cost (material and labor) required to assemble a children's toy

The variable cost (material and labor) required to assemble a children's toy in-house is $0.60/unit. The fixed overhead cost of operating an assembly line is $ 1,000,000 per year. However, it is possible to outsource the assembly operations from a contract manufacturer at a cost of $0.90/unit. If it is possible to sell a children's toy at a price of $1.00/unit, determine the minimum capacity needed for a profitable children's toy assembly operation.

Step by Step Solution

★★★★★

3.50 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

For inhouse Assembly Fixed cost FC 1000000 variable c... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

The following tasks are required to assemble a product. What takt time is required to achieve an hourly output of 30 units per hour? b. Calculate the minimum number of workstations required to...

The following tasks are required to assemble a product The company believes that the market rate of demand for the product requires an output of 12 per hour. Calculate the takt time and then use the...

Fixed costs per annum P60 000 Unit selling price 20 Unit variable cost 10 Relevant range 4 00012 000 units REQUIRED: Calculate the following: a. Break-Even Point in b. Units to be sold to obtain the...

PLEASE COMPLETE NO LATER THAN 10/28 @3:30PM Each question(1,2,& 3) must be a minimum of 200 words. Please EXPLAIN answers in FULL detail and make answers knowledgeable based off the attached reading,...

Responsibility Center Presentation Imagine you have been selected by your manager to present a training session to a group of new employees. The new hires do not have accounting backgrounds and have...

Can you please help me with questions 8 and 9 for Case 6..... I have answers to questions 1-7 if needed... Cases for Management Decision-Making CA-1 Suggested Uses of Cases Case Overview CASE 1 This...

Good Morning... I need help with questions 1-7 for Case 6 in the document attached...Please. Cases for Management Decision-Making CA-1 Suggested Uses of Cases Case Overview CASE 1 This case is the...

Instructions are highlighted Issues in Accounting Education Vol. 15, No. 2 May 2000 Budgeting and Performance Evaluation at the Berkshire Toy Company Dean Crawford and Eleanor G. Henry ABSTRACT: This...

LEGO GROUP: AN OUTSOURCING JOURNEY PROLOGUE The last five years rather adventurous journey from 2004 to 2009 had taught the fifth-largest toy maker in the world - the LEGO Group - the importance of...

Please help with the case analysis. Need the answers in the next 4 hours. Questions to be answered: Based on the information and assumptions provided in the case, calculate the market potential for...

FILL OUT THE MISSING INFORMATION IN THE T-ACCOUNTS: Alpha Watches completed the following selected transactions during 2016 and 2017: i (Click the icon to view the transactions.) Requirements 1. The...

What is the difference between an exam and a test?

02.02-PR025 If a fund pays 12% compounded annually, what single deposit now will accumulate $12,000 at the end of the 10th year? If the fund pays 6% compounded annually, what single deposit now is...

Multiple Choice Questions Identify the best answer for each of the following: Questions 1 through 3 are based on the following scenario: Matthew County issued a six-month, 6%, $1,000,000 bond...

The statement of financial position of Washbud Private University as of the end of its fiscal year, June 30, 2018, is as follows: The following transactions occurred during the fiscal year ended June...

Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 40,000 shares of cumulative preferred 2% stock, $75 par, and 100,000 shares of $50 par common. During its first...

The average high school teacher annual salary is $43,000 (Payscale.com, August 20, 2010). Let teacher salary be normally distributed with a standard deviation of $18,000. a. What percentage of high...

High Tension Transformers, Inc., manufactures heavy-duty transformers for electrical switching stations. The company uses variable costing for internal management reports and absorption costing for...

A partially completed pension spreadsheet showing the relationships among the elements that constitute Carney, Incorporated's defined benefit pension plan follows. Six years earlier, Camey revised...

Suppose that the annual demand for a component is approximately 60,000 units. The company orders the component from a supplier who has offered the following quantity discount schedule. Order Quantity...

An accounting firm monitors its tax advisory service by sampling 200 tax records and auditing the returns to determine whether there is an error that requires an amended return be filed. The firm...

What are the steps of strategic planning?

A crate of fragile dishes is in the back of a pickup truck. The truck accelerates north from a stop sign, and the crate moves without slipping. Does the friction force on the crate point north or...

An astronaut orbiting the earth is handed two balls that have identical outward appearances. However, one is hollow while the other is filled with lead. How can the astronaut determine which is...

Boxes A and B in FIGURE Q6.13 both remain at rest. Is the friction force on A larger than, smaller than, or equal to the friction force on B? Explain. Figure Q6.13