Incremental Benefit /(cost) | ||
Incremental savings | ||
Direct material (5*45000) | 225000 | |
Direct labor (11*45000) | 495000 | |
Variable overhead (4*45000) | 180000 | |
Fixed overhead (9.9*1/3*45000) | 148500 | |
Rental income | 96000 | |
Total incremental savings | 1144500 | |
Incremental cost | ||
Purchase cost (26.5*45000) | (1192500) | |
Financial advantage /(disadvantage) | (48000) |
Financial disadvantage of (48000)
#
If 2/3 fixed overhead continues to be incurred , 1/3 of fixed overhead will be saved [1-2/3 ]
Han Products manufactures 45,000 units of part S-6 each year for use on its production line....
Han Products manufactures 45,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-5 is as follows: Direct materials Direct labour Variable overhead Fixed overhead $ 5.00 11.00 4.00 9.90 Total cost per part $29.90 An outside supplier has offered to sell 45,000 units of part S-6 each year to Han Products for $26.50 per part. If Han Products accepts this offer, the facilities now being...
Han Products manufactures 45,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is as follows Direct materials Direct labour Variable overhead Fixed overhead $ 5.00 11.00 4.00 9.90 Total cost per part $29.90 An outside supplier has offered to sell 45,000 units of part S-6 each year to Han Products for $26.50 per part. if Han Products accepts this offer, the facilities now being...
Han
Products manufactures 34,000 units of part S-6 each year for use on
its production line. At this level of activity, the cost per unit
for part S-6 is:
Han Products manufactures 34,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part 5-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 3.80 11.00 2.20 6.00 $23.00 An outside...
Han Products manufactures 28,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 3.60 11.00 2.40 6.00 $ 23.00 An outside supplier has offered to sell 28,000 units of part S-6 each year to Han Products for $21 per part. If Han Products accepts this offer, the facilities now...
Han Products manufactures 40,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials $3.30 Direct labor 12.00 Variable manufacturing overhead Fixed manufacturing overhead 2.70 6.00 Total cost per part 24.00 An outside supplier has offered to sell 40,000 units of part S-6 each year to Han Products for $22 per part. If Han Products accepts this offer, the facilities now being used...
Han Products manufactures 36,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 4.00 8.00 2.00 9.00 $ 23.00 An outside supplier has offered to sell 36,000 units of part 5-6 each year to Han Products for $19 per part. If Han Products accepts this offer, the facilities now...
Han Products manufactures 26,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 4.00 9.00 2.00 9.00 $ 24.00 An outside supplier has offered to sell 26,000 units of part S-6 each year to Han Products for $20 per part. If Han Products accepts this offer, the facilities now...
Han Products manufactures 23,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials $ 3.70 Direct labor 11.00 Variable manufacturing overhead 2.30 Fixed manufacturing overhead 9.00 Total cost per part $ 26.00 An outside supplier has offered to sell 23,000 units of part S-6 each year to Han Products for $22 per part. If Han Products accepts this offer, the facilities now...
Han Products manufactures 35,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 3.90 12.00 2.10 9.00 $ 27.00 An outside supplier has offered to sell 35,000 units of part S-6 each year to Han Products for $23 per part. If Han Products accepts this offer, the facilities now...
Han Products manufactures 52,500 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is as follows: Direct matenals Direct labour Variable overhead Fixed overhead $ 5.75 11.75 4.75 10.35 Total cost per part $32.60 An outside supplier has offered to sell 52,500 units of part S-6 each year to Han Products for $28.75 per part. If Han Products accepts this offer the facilities now being...