Coronado’s Manufacturing Company can make 100 units of a
necessary component part with the following costs:
Direct Materials | $120000 |
Direct Labor | 23000 |
Variable Overhead | 54000 |
Fixed Overhead | 30000 |
If Coronado’s Manufacturing Company can purchase the component
externally for $195000 and only $7000 of the fixed costs can be
avoided, what is the correct make-or-buy decision?
a. Make and save $22000
b. Buy and save $9000
c. Buy and save $22000
d. Make and save $9000
Correct answer-----------b. Buy and save $9000
Working
Total Cost of Buying | $ 195,000 |
Total Cost of manufacturing | $ 204,000 |
Financial advantage of buying | $ 9,000 |
.
Differential Analysis | ||
Make | Buy | |
Direct material | $ 120,000 | |
Direct labor | $ 23,000 | |
Variable Overheads | $ 54,000 | |
Avoidable Fixed overhead | $ 7,000 | |
Purchase price | $ 195,000 | |
Total relevant Cost | $ 204,000 | $ 195,000 |
Coronado’s Manufacturing Company can make 100 units of a necessary component part with the following costs:...
Oriole's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $116000 21000 47000 30000 If Oriole's Manufacturing Company can purchase the component externally for $185000 and only $7000 of the fixed costs can be avoided, what is the correct make-or-buy decision? O Buy and save $6000 O Make and save $6000 O Buy and save $18000 o Make and save $18000
Sheridan's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $112000 17000 39000 30000 If Sheridan's Manufacturing Company can purchase the component externally for $170000 and only $6000 of the fixed costs can be avoided, what is the correct make-or-buy decision? Make and save $11000 Make and save $4000 Buy and save $4000 Buy and save $11000
Tex's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials Direct Labor $120,000 25,000 Variable Overhead 45,000 Fixed Overhead 30,000 If Tex's Manufacturing Company can purchase the component externally for $190,000 and only $5,000 of the fixed costs can be avoided, what is the correct make-or-buy decision? Buy and save $5,000 Make and save $5,000 Make and save $15,000 Buy and save $15,000
Multiple Cholce Question 100 Marigold's Manufacturing Company can make 100 units of a necessary component part with the following costs Direct Materials $111000 Direct Labor 16000 Variable Overhead 17000 Fred Overhead 30000 If Marigold's Manufacturing Company can purchase the component externally for $165000 and only $4000 of the fixed costs can be avoided, what is the correct make-or-buy decision? O Buy and save $8000 O Make and save $3000 O Buy and save $3000 O Make and save $3000 Click...
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....
19. Marathon Manufacturing Company can make 10,000 units of a necessary component part with the following costs per unit: Direct Materials $15 Direct Labor Variable Overhead Fixed Overhead Product cost per unit $55 Marathon Manufacturing Company can purchase the component externally for $38 per unit. Only 25% of the total fixed costs can be avoided. What is the correct make-or-buy decision in order to maximize net income? a. Make and save $12,000 6 Buy and save $12,000 C. Make and...
Coronado Industries can produce 100 units of a component part with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $11000 9500 10000 11000 If Coronado Industries 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? Buy and save $4500 Make and save $2500 Make and save $500 Buy and save $2500
Marigold Corp. can produce 100 units of a component part with the following costs: Direct Materials $20000 Direct Labor 4500 Variable Overhead 18000 Fixed Overhead 11000 If Marigold Corp. can purchase the component part externally for $47000 and only $4000 of the fixed costs can be avoided, what is the correct make-or-buy decision? a. Buy and save $2500 b. Make and save $500 c. Make and save $2500 d. Buy and save $4500
Park Industries can produce 100 units of a component part with the following costs: Direct Materials $12000 Direct Labor 3500 Variable Overhead 13000 Fixed Overhead 11000 If Park Industries can purchase the component part externally for $33000 and only $4000 of the fixed costs can be avoided, what is the correct make-or-buy decision? A. Make and save $500 B. Make and save $2,500 C. Buy and save $4,500 D. Buy and save $2,500
Sheridan Company can produce 100 units of a component part with the following costs: Direct Materials $9000 Direct Labor 7500 Variable Overhead 10000 Fixed Overhead 11000 If Sheridan Company can purchase the units externally for $30000, by what amount will its total costs change? An increase of $1500 An increase of $3500 A decrease of $11000 An increase of $30000