Homework Answers
Maximum external price = Relevant manufacturing price
= Direct material + direct labor + variable overhead + Avoidable fixed overhead
= $43000+24000+12000+6000
= $85000
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Crane Company produces 1000 units of a necessary component with the following costs: $43000 24000 Direct...
Crane Company produces 1000 units of a necessary component with the following costs: Direct Materials $24000...
Crane Company produces 1000 units of a necessary component with the following costs: Direct Materials $24000 Direct Labor 5000 Variable Overhead 7000 Fixed Overhead 10000 Crane Company could avoid $6000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Crane Company would accept to acquire the 1000 units externally? $40000 $42000 $36000 $39000
Waterway Industries produces 1000 units of a necessary component with the following costs: Direct Materials $42000...
Waterway Industries produces 1000 units of a necessary component with the following costs: Direct Materials $42000 Direct Labor 23000 Variable Overhead 8000 Fixed Overhead 10000 Waterway Industries could avoid $6000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Waterway Industries would accept to acquire the 1000 units externally? a. $75000 b. $79000 c. $77000 d....
Bonita Industries produces 1000 units of a necessary component with the following costs: Direct Materials $33000...
Bonita Industries produces 1000 units of a necessary component with the following costs: Direct Materials $33000 Direct Labor 14000 Variable Overhead 12000 Fixed Overhead 10000 Bonita Industries could avoid $6000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Bonita Industries would accept to acquire the 1000 units externally?
Bramble Corp. produces 1000 units of a necessary component with the following costs: Direct Materials $28000...
Bramble Corp. produces 1000 units of a necessary component with the following costs: Direct Materials $28000 Direct Labor 9000 Variable Overhead 12000 Fixed Overhead 10000 Bramble Corp. could avoid $6000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Bramble Corp. would accept to acquire the 1000 units externally? $47000 $55000 $49000 $53000
Vaughn Manufacturing produces 1000 units of a necessary component with the following costs: $41000 22000 Direct...
Vaughn Manufacturing produces 1000 units of a necessary component with the following costs: $41000 22000 Direct Materials Direct Labor Variable Overhead Fixed Overhead 11000 10000 Vaughn Manufacturing could avoid $6000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Vaughn Manufacturing would accept to acquire the 1000 units externally? $74000 $73000 $78000 $80000
Waterway Industries produces 1000 units of a necessary component with the following costs: Direct Materials $36000...
Waterway Industries produces 1000 units of a necessary component with the following costs: Direct Materials $36000 Direct Labor 17000 Variable Overhead 11000 Fixed Overhead 10000 Waterway Industries could avoid $6000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Waterway Industries would accept to acquire the 1000 units externally? a. $63000 b. $64000 c. $68000 d....
Question 9 Crane Music produces 59000 blank CDs on which to record music. The CDs have...
Question 9 Crane Music produces 59000 blank CDs on which to record music. The CDs have the following costs: Direct Materials Direct Labour Variable Overhead Fixed Overhead $10000 14000 2500 6500 Crane could avoid $3500 in fixed overhead costs if it acquires the CDs externally. If cost minimization is the major consideration and the company would prefer to buy the 59000 units externally, what is the maximum external price that Crane would expect to pay for the units? $29500 O...
Waterway's Shop can make 1000 units of a necessary component with the following costs: Direct Materials...
Waterway's Shop can make 1000 units of a necessary component with the following costs: Direct Materials $40000 Direct Labor 6000 Variable Overhead 3000 Fixed Overhead The company can purchase the 1000 units externally for $55000. The unavoidable fixed costs are $2000 if the units are purchased externally. An analysis shows that at this external price, the company is indifferent between making or buying the part. What are the fixed overhead costs of making the component? $6000 $8000 $4000 Cannot be...
Vaughn Manufacturing can produce 100 units of a component part with the following costs: Direct Materials...
Vaughn Manufacturing can produce 100 units of a component part with the following costs: Direct Materials $14000 Direct Labor 5500 Variable Overhead 9000 Fixed Overhead 11000 If Vaughn Manufacturing can purchase the component part externally for $35000 and only $4000 of the fixed costs can be avoided, what is the correct make- or-buy decision? Make and save $500 Buy and save $500 OMake and save $2500 Buy and save $6500 Sunland Music produces 60000 CDs on which to record music....
Coronado Music produces 60000 CDs on which to record music. The CDs have the following costs:...
Coronado Music produces 60000 CDs on which to record music. The CDs have the following costs: Direct Materials $17500 Direct Labor 20000 Variable Overhead 4000 Fixed Overhead 7000 Coronado could avoid $4000 in fixed overhead costs if it acquires the CDs externally. If cost minimization is the major consideration and the company would prefer to buy the 60000 units externally, what is the maximum amount that Coronado should pay to purchase the units? a. $41500 b. $48500 c. $44500 d....
Vaughn Manufacturing produces 1000 units of a necessary component with the following costs: $41000 22000 Direct Materials Direct Labor Variable Overhead Fixed Overhead 11000 10000 Vaughn Manufacturing could avoid $6000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Vaughn Manufacturing would accept to acquire the 1000 units externally? $74000 $73000 $78000 $80000
Question 9 Crane Music produces 59000 blank CDs on which to record music. The CDs have the following costs: Direct Materials Direct Labour Variable Overhead Fixed Overhead $10000 14000 2500 6500 Crane could avoid $3500 in fixed overhead costs if it acquires the CDs externally. If cost minimization is the major consideration and the company would prefer to buy the 59000 units externally, what is the maximum external price that Crane would expect to pay for the units? $29500 O...
Waterway's Shop can make 1000 units of a necessary component with the following costs: Direct Materials $40000 Direct Labor 6000 Variable Overhead 3000 Fixed Overhead The company can purchase the 1000 units externally for $55000. The unavoidable fixed costs are $2000 if the units are purchased externally. An analysis shows that at this external price, the company is indifferent between making or buying the part. What are the fixed overhead costs of making the component? $6000 $8000 $4000 Cannot be...
Vaughn Manufacturing can produce 100 units of a component part with the following costs: Direct Materials $14000 Direct Labor 5500 Variable Overhead 9000 Fixed Overhead 11000 If Vaughn Manufacturing can purchase the component part externally for $35000 and only $4000 of the fixed costs can be avoided, what is the correct make- or-buy decision? Make and save $500 Buy and save $500 OMake and save $2500 Buy and save $6500 Sunland Music produces 60000 CDs on which to record music....
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