Homework Answers
a) Total relevant cost
| Make | Buy | |
| Direct material | 107100 | |
| Direct labor | 50400 | |
| Variable overhead | 18900 | |
| Purchase cost (6300*31) | 195300 | |
| Total relevant cost | 176400 | 195300 |
b) No
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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...
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 $...
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...
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...
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...
Exercise 6-10A Outsourcing decision LO 6-3 Perez Bicycle Manufacturing Company currently produces the handlebars used in...
Exercise 6-10A Outsourcing decision LO 6-3 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 7,400 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 $33 each; they cost $36 each to make. The following is a detailed breakdown of current...
King City Specialty Bikes (KCSB) produces high-end bicycles. The costs to manufacture and market the bicycles...
King City Specialty Bikes (KCSB) produces high-end bicycles. The costs to manufacture and market the bicycles at the company's volume of 2,000 units per month are shown in the following table: Unit manufacturing costs Variable costs $ 250 Fixed overhead 116 Total unit manufacturing costs $ 366 Unit nonmanufacturing costs Variable 70 Fixed 136 Total unit nonmanufacturing costs 206 Total unit costs $ 572 The company has the capacity to produce 2,000 units per month and always operates at full...
King City Specialty Bikes (KCSB) produces high-end bicycles. The costs to manufacture and market the bicycles...
King City Specialty Bikes (KCSB) produces high-end bicycles. The costs to manufacture and market the bicycles at the company's volume of 2,000 units per month are shown in the following table: Unit manufacturing costs Variable costs $ 250 Fixed overhead 117 Total unit manufacturing costs $ 367 Unit nonmanufacturing costs Variable 70 Fixed 137 Total unit nonmanufacturing costs 207 Total unit costs $ 574 The company has the capacity to produce 2,000 units per month and always operates at full...
King City Specialty Bikes (KCSB) produces high-end bicycles. Costs to manufacture and market the bicycles at...
King City Specialty Bikes (KCSB) produces high-end bicycles.
Costs to manufacture and market the bicycles at last year's volume
level of 1,800 bicycles per month are shown in the following table:
Variable manufacturing per unit $248.00 Total fixed manufacturing
$232,200 Variable nonmanufacturing per unit $54.00 Total fixed
nonmanufacturing $262,800 KCSB expects to produce and sell 2,100
bicycles per month in the coming year. The bicycles sell for $580
each. An outside contractor makes an offer to assemble 900 of
KCSB's...
King City Specialty Bikes (KCSB) produces high-end bicycles. The costs to manufacture and market the bicycles...
King City Specialty Bikes (KCSB) produces high-end bicycles. The costs to manufacture and market the bicycles at the company's volume of 2,000 units per month are shown in the following table. $240 120 $360 Unit manufacturing costs Variable costs Fixed overhead Total unit manufacturing costs Unit nonmanufacturing costs Variable Fixed Total unit nonmanufacturing costs Total unit costs 60 140 200 $560 The company has the capacity to produce 2,000 units per month and always operates at full capacity. The bicycles...
King City Specialty Bikes (KCSB) produces high-end bicycles. The costs to manufacture and market the bicycles...
King City Specialty Bikes (KCSB) produces high-end bicycles. The costs to manufacture and market the bicycles at the company's volume of 2,000 units per month are shown in the following table. Unit manufacturing costs Variable costs $ 250 Fixed overhead 123 Total unit manufacturing costs $ 373 Unit nonmanufacturing costs Variable 70 Fixed 143 Total unit nonmanufacturing costs 213 Total unit costs $ 586 The company has the capacity to produce 2,000 units per month and always operates at full...
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 $...
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...
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...
Exercise 6-10A Outsourcing decision LO 6-3 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 7,400 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 $33 each; they cost $36 each to make. The following is a detailed breakdown of current...
King City Specialty Bikes (KCSB) produces high-end bicycles.
Costs to manufacture and market the bicycles at last year's volume
level of 1,800 bicycles per month are shown in the following table:
Variable manufacturing per unit $248.00 Total fixed manufacturing
$232,200 Variable nonmanufacturing per unit $54.00 Total fixed
nonmanufacturing $262,800 KCSB expects to produce and sell 2,100
bicycles per month in the coming year. The bicycles sell for $580
each. An outside contractor makes an offer to assemble 900 of
KCSB's...
King City Specialty Bikes (KCSB) produces high-end bicycles. The costs to manufacture and market the bicycles at the company's volume of 2,000 units per month are shown in the following table. $240 120 $360 Unit manufacturing costs Variable costs Fixed overhead Total unit manufacturing costs Unit nonmanufacturing costs Variable Fixed Total unit nonmanufacturing costs Total unit costs 60 140 200 $560 The company has the capacity to produce 2,000 units per month and always operates at full capacity. The bicycles...
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