Homework Answers
| Per Unit | Total | |
| Total relevant cost | 30 | 222000 |
| No, the president's conclusion is wrong | ||
| Workings: | ||
| Per Unit | Total 7400 units | |
| Materials | 18 | 133200 |
| Labor | 9 | 66600 |
| Overhead | 3 | 22200 |
| Total | 30 | 222000 |
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Exercise 6-10A Outsourcing decision LO 6-3 Perez Bicycle Manufacturing Company currently produces the handlebars used in...
Perez Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality...
Perez Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Perez produces and sells only 6,100 bikes each year. Due to the low volume of activity, Perez is unable to obtain the economies of scale that larger producers achieve. For example, Perez could buy the handlebars for $35 each; they cost $38 each to make. The following is a detailed breakdown of current production costs: Unit Cost Total Item...
Solomon Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality...
Solomon Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Solomon produces and sells only 7,400 bikes each year. Due to the low volume of activity, Solomon is unable to obtain the economies of scale that larger producers achieve. For example, Solomon could buy the handlebars for $31 each; they cost $34 each to make. The following is a detailed breakdown of current production costs: Unit Cost Total $16...
Jordan Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality...
Jordan Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Jordan produces and sells only 6,200 bikes each year. Due to the low volume of activity, Jordan is unable to obtain the economies of scale that larger producers achieve. For example, Jordan could buy the handlebars for $37 each; they cost $40 each to make. The following is a detailed breakdown of current production costs. Unit Total Cost $...
Jordan Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality...
Jordan Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Jordan produces and sells only 6,300 bikes each year. Due to the low volume of activity, Jordan is unable to obtain the economies of scale that larger producers achieve. For example, Jordan could buy the handlebars for $31 each; they cost $34 each to make. The following is a detailed breakdown of current production costs. Unit Cost Total Item...
Stuart Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are highquality...
Stuart Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are highquality racing bikes with limited sales. Stuart produces and sells only 7,200 bikes each year. Due to the low volume of activity, Stuart is unable to obtain the economies of scale that larger producers achieve. For example, Stuart could buy the handlebars for $31 each; they cost $34 each to make. The following is a detailed breakdown of current production costs: Item Unit Cost Total...
benson electronics currently produces the shipping Exercise 13-13 Outsourcing decision affected by opportunity costs LO 13-3...
benson electronics currently produces the shipping
Exercise 13-13 Outsourcing decision affected by opportunity costs LO 13-3 Benson Electronics currently produces the shipping containers it uses to deliver the electronics products itsells. The monthly cost of producing 9,300 containers follows: Unit-level materials Unit-level labor Unit-level overhead Product-level costs" Allocated facility-level costs $ 6,000 6,200 3,600 8,100 26,300 *One-third of these costs can be avoided by purchasing the containers Russo Container Company has offered to sell comparable containers to Benson for $2.60...
Perez Company produces mathematical and financial calculators and operates at capacity. Data rela...
Perez Company produces mathematical and financial calculators and operates at capacity. Data related to the two products follows Requirements 1. Choose a cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product. Compute the manufacturing cost per unit for each product. How might Perez's managers use the new cost information from its activity-based costing system to better manage its business? Click the icon to view the data.) 2. 3. Total manufacturing overhead...
The Big Wheels Company currently purchases bicycle seats for its bikes for $30 each. The company...
The Big Wheels Company currently purchases bicycle seats for its bikes for $30 each. The company has excess capacity and is considering the possibility of making the component. The Cost Accounting Department estimates that the following costs would be incurred to make each unit of the component: Direct materials $ 8 Direct labor 10 Variable overhead 8 Fixed overhead (depreciation, rent, insurance) 7 Total manufacturing cost $33 Additionally, if Big Wheels decides to make the component, additional foremen,...
Problem 13-25 Effects of the level of production on an outsourcing decision LO 13-3 Benson Chemical...
Problem 13-25 Effects of the level of production on an outsourcing decision LO 13-3 Benson Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Benson produces a relatively small amount (18,000 units) of the cream and is considering the purchase of the product from an outside supplier for $4.80 each. If Benson purchases from the outside supplier, it would continue to sell and distribute the cream under...
Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 13,000 units of a component used...
Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Basu Company produces 13,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.31. The unit cost is: Direct materials $0.89 Direct labor 0.27 Variable overhead 0.07 Fixed overhead 2.10 Total unit cost $3.33 Required: 1. What are the alternatives for Basu Company? Make the part in house or buy the part externally 2. Assume that none of the fixed cost is avoidable. List...
Perez Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Perez produces and sells only 6,100 bikes each year. Due to the low volume of activity, Perez is unable to obtain the economies of scale that larger producers achieve. For example, Perez could buy the handlebars for $35 each; they cost $38 each to make. The following is a detailed breakdown of current production costs: Unit Cost Total Item...
Solomon Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Solomon produces and sells only 7,400 bikes each year. Due to the low volume of activity, Solomon is unable to obtain the economies of scale that larger producers achieve. For example, Solomon could buy the handlebars for $31 each; they cost $34 each to make. The following is a detailed breakdown of current production costs: Unit Cost Total $16...
Jordan Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Jordan produces and sells only 6,200 bikes each year. Due to the low volume of activity, Jordan is unable to obtain the economies of scale that larger producers achieve. For example, Jordan could buy the handlebars for $37 each; they cost $40 each to make. The following is a detailed breakdown of current production costs. Unit Total Cost $...
Jordan Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Jordan produces and sells only 6,300 bikes each year. Due to the low volume of activity, Jordan is unable to obtain the economies of scale that larger producers achieve. For example, Jordan could buy the handlebars for $31 each; they cost $34 each to make. The following is a detailed breakdown of current production costs. Unit Cost Total Item...
benson electronics currently produces the shipping
Exercise 13-13 Outsourcing decision affected by opportunity costs LO 13-3 Benson Electronics currently produces the shipping containers it uses to deliver the electronics products itsells. The monthly cost of producing 9,300 containers follows: Unit-level materials Unit-level labor Unit-level overhead Product-level costs" Allocated facility-level costs $ 6,000 6,200 3,600 8,100 26,300 *One-third of these costs can be avoided by purchasing the containers Russo Container Company has offered to sell comparable containers to Benson for $2.60...
Perez Company produces mathematical and financial calculators and operates at capacity. Data related to the two products follows Requirements 1. Choose a cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product. Compute the manufacturing cost per unit for each product. How might Perez's managers use the new cost information from its activity-based costing system to better manage its business? Click the icon to view the data.) 2. 3. Total manufacturing overhead...
Problem 13-25 Effects of the level of production on an outsourcing decision LO 13-3 Benson Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Benson produces a relatively small amount (18,000 units) of the cream and is considering the purchase of the product from an outside supplier for $4.80 each. If Benson purchases from the outside supplier, it would continue to sell and distribute the cream under...
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