Question

Direct materials $ 737,000 Direct labor 134,000 Variable MOH 67,000 435,500 Fixed MOH $ Total manufacturing cost for 67,000 units 1,373,500 Print Done

Answer 1

CoolSystems Best Use of Facilities Analysis Make Variable unit cost of obtaining the optical switches Number of optical switches Total variable cost of obtaining the optical switches Add: Income from idle facilities to operating income Expected net cost of obtaining the optical switches $14 $83,000 $1,162,000 $140,000 $1,302,000 Buy and Use Facilities for Other Product $11 $83,000 $913,000 Opportunity cost $913,000 Alternative way of showing CoolSystems Best Use of Facilities Analysis Buy and Use Make Facilities for Other Product Variable unit cost of obtaining the optical switches $14 $11 Number of optical switches $83,000 $83,000 Total variable cost of obtaining the optical switches $1,162,000 $913,000 Less: Income from idle facilities to operating income $140,000 Expected net cost of obtaining the optical switches $1,162,000 $773,000