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Solution 1:
Incremental Analysis - Ayayai Manufacturing Company | |||
Particulars | Make CISCO | Buy CISCO | Net Income Increase (Decrease) |
Direct material | $35,550.00 | $35,550.00 | |
Direct labor | $31,600.00 | $31,600.00 | |
Indirect labor | $3,160.00 | $3,160.00 | |
Utilities | $2,765.00 | $2,765.00 | |
Depreciation | $2,760.00 | $860.00 | $1,900.00 |
Property taxes | $720.00 | $260.00 | $460.00 |
Insurance | $1,420.00 | $560.00 | $860.00 |
Purchase price | $73,349.00 | -$73,349.00 | |
Frieght and inspection | $2,686.00 | -$2,686.00 | |
Receiving costs | $1,260.00 | -$1,260.00 | |
Total annual costs | $77,975.00 | $78,975.00 | -$1,000.00 |
The company should make CISCO.
Yes, if Ayayai Company has the opportunity to produce $3,000 of net income with the facilities currently being used to manufacture CISCO, then company should buy the CISCO because it will result in incremental benefit of = $3,000 - $1,000 = $2,000
Problem 12-2 The management of Ayayai Manufacturing Company is trying to decide whether to continue manufacturing...
Problem 12-2 The management of Ayayai Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company's finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2017. 1. 7.900 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit...
Problem 20-02A a-c The management of Shatner Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company's finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2020. 1. 7,900 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO...
The management of Shatner Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a co The following information was collected from the accounting records and production data for the year ending December 31, 2020. 1.7,900 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit were: direct materials $5.11, direct labor $4.54, indirect...
Current Artempein Progress The management of Ivanhoe Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO is a component of the company's finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2020 1.8,000 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit...
The management of Shatner Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company’s finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2020. 1. 7,900 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit were: direct...
The management of Concord Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company’s finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2017. 1. 8,000 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit were: direct...
The management of Shatner Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company's finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2020. 1.7.900 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit were: direct materials...
The management of Concord Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company’s finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2017. 1. 8,000 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit were: direct...
Problem 21-2A The management of Shatner Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company's finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2017. 1. 8,100 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit...
Problem 20-2A The management of Shatner Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company’s finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2017. 1. 8,000 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit...