Homework Answers
Solution:
Revenue if defective unit process further = 300*$93 = $27,900
Revenue if defective units sold as is = 300 * $21 = $6,300
Incremental revenue on further processing = $27,900 - $6,300 = $21,600
Further processing cost = 300*$44 = $13,200
Net financial advantage of further processing = $21,600 - $13,200 = $8,400
Hence $8,400 net increase in operating income if the ceiling fans are repaired.
Hence option A is correct.
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Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to...
Frannie Fans currently manufactures ceiling fans that include
remotes to operate them. The current cost to manufacture 10,260
remotes is as follows:
Cost
Direct materials
$
66,690
Direct labor
$
56,430
Variable overhead
$
30,780
Fixed overhead
$
51,300
Total
$
205,200
Frannie is approached by Lincoln Company which offers to make
the remotes for $18 per unit.
Required:
1. Compute the difference in cost between
making and buying the remotes if none of the fixed costs can be
avoided....
Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to...
Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,280 remotes is as follows: Cost Direct materials Direct labor Variable overhead Fixed overhead Total $ 66,820 $ 56,540 $ 30,840 $ 51,400 $ 205,600 Frannie is approached by Lincoln Company which offers to make the remotes for $18 per unit. Required: 1. Compute the difference in cost between making and buying the remotes if none of the fixed costs can be avoided....
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Frannie Fans currently manufactures ceiling fans that include
remotes to operate them. The current cost to manufacture 10,260
remotes is as follows:
Cost
Direct materials
$
66,690
Direct labor
$
56,430
Variable overhead
$
30,780
Fixed overhead
$
51,300
Total
$
205,200
Frannie is approached by Lincoln Company which offers to make
the remotes for $18 per unit.
Required:
1. Compute the difference in cost between
making and buying the remotes if none of the fixed costs can be
avoided....
Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,280 remotes is as follows: Cost Direct materials Direct labor Variable overhead Fixed overhead Total $ 66,820 $ 56,540 $ 30,840 $ 51,400 $ 205,600 Frannie is approached by Lincoln Company which offers to make the remotes for $18 per unit. Required: 1. Compute the difference in cost between making and buying the remotes if none of the fixed costs can be avoided....
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Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,220 remotes is as follows: Cost Direct materials Direct labor Variable overhead Fixed overhead Total $ 66,430 $ 56,210 $ 30,660 $ 51,100 $ 204,400 Frannie is approached by Lincoln Company which offers to make the remotes for $18 per unit. Required: 1. Compute the difference in cost between making and buying the remotes If none of the fixed costs can be avoided....
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