Stuart Electronics currently produces the shipping containers it uses to deliver the electronics products it sells....
Stuart Electronics currently produces the shipping containers it
uses to deliver the electronics products it sells. The monthly cost
of producing 9,000 containers follows.
| Unit-level materials | $ | 5,100 | |
| Unit-level labor | 6,700 | ||
| Unit-level overhead | 3,900 | ||
| Product-level costs* | 8,100 | ||
| Allocated facility-level costs | 27,000 | ||
*One-third of these costs can be avoided by purchasing the
containers.
Russo Container Company has offered to sell comparable containers
to Stuart for $2.80 each.
Required
-
Calculate the total relevant cost. Should Stuart continue to make the containers?
-
Stuart could lease the space it currently uses in the manufacturing process. If leasing would produce $11,600 per month, calculate the total avoidable costs. Should Stuart continue to make the containers?
Homework Answers
a) Total relevant cost
| Material cost | 5100 |
| Direct labor | 6700 |
| Variable overhead | 3900 |
| Product facility cost (8100/3) | 2700 |
| Total relevant cost | 18400 |
Purchase cost = 9000*2.8 = 25200
Yes, Continue to make
b) Total Avoidable cost
| Material cost | 5100 |
| Direct labor | 6700 |
| Variable overhead | 3900 |
| Product facility cost (8100/3) | 2700 |
| Opportunity Cost | 11600 |
| Total relevant cost | 30000 |
No, Should not continue to make
Add Answer to:
Stuart Electronics currently produces the shipping containers it
uses to deliver the electronics products it sells....
Stuart Electronics currently produces the shipping containers it uses to deliver the electronics products it sells....
Stuart Electronics currently produces the shipping containers it
uses to deliver the electronics products it sells. The monthly cost
of producing 9,200 containers follows:
Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level osts 27,200 $ 6,800 6,400 4,000 11,400 One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Stuart for $2.80 each Required a. Calculate the total relevant cost. Should Stuart continue to make the containers?...
Benson Electronics currently produces the shipping containers it uses to deliver the electronics products it sells....
Benson Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows: Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 6,000 6,700 3,700 9,900 26,900 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Benson for $2.50 each. Required a. Calculate the total relevant cost. Should Benson continue to make the containers?...
Adams Electronics currently produces the shipping containers it uses to deliver the electronics products it sells....
Adams Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,200 containers follows: Unit-level materials Unit-level labor Unit-level overhead Product-level costs Allocated facility-level costs $ 6,100 6,600 3,400 8.400 28,100 *One-third of these costs can be avoided by purchasing the containers Russo Container Company has offered to sell comparable containers to Adams for $2.60 each. Required a. Calculate the total relevant cost. Should Adams continue to make the containers?...
Benson Electronics currently produces the shipping containers it uses to deliver the electronics products it sells....
Benson Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,000 containers follows: Unit-level materials $ 5,400 Unit-level labor 6,300 Unit-level overhead 3,300 Product-level costs* 12,000 Allocated facility-level costs 26,900 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Benson for $2.70 each. Required Calculate the total relevant cost. Should Benson continue to make the containers? Benson...
8. Award: 10.00 points Rooney Electronics currently produces the shipping containers it uses to deliver the...
8. Award: 10.00 points Rooney Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,200 containers follows: Unit-level materials Unit-level labor Unit-level overhead Product-level costs Allocated facility-level costs $ 6.200 6.300 3,300 11.700 26,900 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rooney for $2.90 each. Required a. Calculate the total relevant cost. Should Rooney continue...
benson electronics currently produces the shipping Exercise 13-13 Outsourcing decision affected by opportunity costs LO 13-3...
benson electronics currently produces the shipping
Exercise 13-13 Outsourcing decision affected by opportunity costs LO 13-3 Benson Electronics currently produces the shipping containers it uses to deliver the electronics products itsells. The monthly cost of producing 9,300 containers follows: Unit-level materials Unit-level labor Unit-level overhead Product-level costs" Allocated facility-level costs $ 6,000 6,200 3,600 8,100 26,300 *One-third of these costs can be avoided by purchasing the containers Russo Container Company has offered to sell comparable containers to Benson for $2.60...
3. Gulf Shores Electronics currently produces the shipping containers it uses in the delivery of the...
3. Gulf Shores Electronics currently produces the shipping containers it uses in the delivery of the electronic products it sells. The monthly unit costs of producing 4,000 containers is given as follows: TOTAL UNIT Unit-level materials $ 16,000 4.00 Unit-level labor 12,000 3.00 Unit-level overhead 8,000 2.00 Product-level costs 10,000 2.50 Allocated facility-level costs 20.000 5.00 TOTAL COSTS 66,000 16.50 Eighty percent (60%) of Product-level costs can be avoided by purchasing the containers. Ten percent (10%) of Facility-level costs can...
Stuart Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the...
Stuart Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Stuart produces a relatively small amount (14,000 units) of the cream and is considering the purchase of the product from an outside supplier for $5.70 each. If Stuart purchases from the outside supplier, it would continue to sell and distribute the cream under its own brand name. Stuart's accountant constructed the following profitability analysis: Revenue (14,000 units...
Baird Chemical Company makes a variety of cosmetic products, one of which is a skin cream...
Baird Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Baird produces a relatively small amount (17,000 units) of the cream and is considering the purchase of the product from an outside supplier for $4.70 each. If Baird purchases from the outside supplier, it would continue to sell and distribute the cream under its own brand name. Baird's accountant constructed the following profitability analysis: Revenue (17,000 units...
Baird Chemical Company makes a variety of cosmetic products, one of which is a skin cream...
Baird Chemical Company makes a variety of cosmetic products, one
of which is a skin cream designed to reduce the signs of aging.
Baird produces a relatively small amount (17,000 units) of the
cream and is considering the purchase of the product from an
outside supplier for $4.70 each. If Baird purchases from the
outside supplier, it would continue to sell and distribute the
cream under its own brand name. Baird’s accountant constructed the
following profitability analysis:
Identify the cost...
Stuart Electronics currently produces the shipping containers it
uses to deliver the electronics products it sells. The monthly cost
of producing 9,200 containers follows:
Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level osts 27,200 $ 6,800 6,400 4,000 11,400 One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Stuart for $2.80 each Required a. Calculate the total relevant cost. Should Stuart continue to make the containers?...
Benson Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows: Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 6,000 6,700 3,700 9,900 26,900 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Benson for $2.50 each. Required a. Calculate the total relevant cost. Should Benson continue to make the containers?...
Adams Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,200 containers follows: Unit-level materials Unit-level labor Unit-level overhead Product-level costs Allocated facility-level costs $ 6,100 6,600 3,400 8.400 28,100 *One-third of these costs can be avoided by purchasing the containers Russo Container Company has offered to sell comparable containers to Adams for $2.60 each. Required a. Calculate the total relevant cost. Should Adams continue to make the containers?...
8. Award: 10.00 points Rooney Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,200 containers follows: Unit-level materials Unit-level labor Unit-level overhead Product-level costs Allocated facility-level costs $ 6.200 6.300 3,300 11.700 26,900 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rooney for $2.90 each. Required a. Calculate the total relevant cost. Should Rooney continue...
benson electronics currently produces the shipping
Exercise 13-13 Outsourcing decision affected by opportunity costs LO 13-3 Benson Electronics currently produces the shipping containers it uses to deliver the electronics products itsells. The monthly cost of producing 9,300 containers follows: Unit-level materials Unit-level labor Unit-level overhead Product-level costs" Allocated facility-level costs $ 6,000 6,200 3,600 8,100 26,300 *One-third of these costs can be avoided by purchasing the containers Russo Container Company has offered to sell comparable containers to Benson for $2.60...
3. Gulf Shores Electronics currently produces the shipping containers it uses in the delivery of the electronic products it sells. The monthly unit costs of producing 4,000 containers is given as follows: TOTAL UNIT Unit-level materials $ 16,000 4.00 Unit-level labor 12,000 3.00 Unit-level overhead 8,000 2.00 Product-level costs 10,000 2.50 Allocated facility-level costs 20.000 5.00 TOTAL COSTS 66,000 16.50 Eighty percent (60%) of Product-level costs can be avoided by purchasing the containers. Ten percent (10%) of Facility-level costs can...
Stuart Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Stuart produces a relatively small amount (14,000 units) of the cream and is considering the purchase of the product from an outside supplier for $5.70 each. If Stuart purchases from the outside supplier, it would continue to sell and distribute the cream under its own brand name. Stuart's accountant constructed the following profitability analysis: Revenue (14,000 units...
Baird Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Baird produces a relatively small amount (17,000 units) of the cream and is considering the purchase of the product from an outside supplier for $4.70 each. If Baird purchases from the outside supplier, it would continue to sell and distribute the cream under its own brand name. Baird's accountant constructed the following profitability analysis: Revenue (17,000 units...
Baird Chemical Company makes a variety of cosmetic products, one
of which is a skin cream designed to reduce the signs of aging.
Baird produces a relatively small amount (17,000 units) of the
cream and is considering the purchase of the product from an
outside supplier for $4.70 each. If Baird purchases from the
outside supplier, it would continue to sell and distribute the
cream under its own brand name. Baird’s accountant constructed the
following profitability analysis:
Identify the cost...
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