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Sav [38]
3 years ago
12

Derby Inc. manufactures a product which contains a small part. The company has always purchased this motor from a supplier for $

125 each. Derby recently upgraded its own manufacturing capabilities and now has enough excess capacity (including trained workers) to begin manufacturing the motor instead of buying it. The company prepared the following per unit cost projections of making the motor, assuming that overhead is allocated to the part at the normal predetermined overhead rate of 150% of direct labor cost.Direct material $ 38Direct labor 50Overhead (fixed and variable) 75Total $ 163The required volume of output to produce the motors will not require any incremental fixed overhead. Incremental variable overhead cost is $21 per motor. What is the effect on income if Derby decides to make the motors
Business
1 answer:
skad [1K]3 years ago
8 0

Answer:

Income will be higher by $16 per unit

Explanation:

As per the data given in the question,

Direct material = $38

Direct labor = $50

Overhead = $21

Total variable cost = $38 + $50 + $21

= $109

Cost of supply = $125

Income increased per unit = cost of supply - total variable cost  

=$125 - $109

= $16

Because the cost of inhouse is lower therefore net income will be more by $16 per unit

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4 0
3 years ago
Describe how you would apply for a mortgage.
ExtremeBDS [4]

You have to complete a " Mortgage Application", the application will usually ask for a credit report, any credit accounts, amount of income, available funds, credit card balances, and a price range. Once a lender has reviewed your application he/she will decide rather to approve or disapprove your application. If your application is approved you will need to make a down payment. A borrower with good/excellent credit is more likely to be approved for a mortgage. Interest rates will determine how much you will pay monthly. Interest rates can also change while the loan application is being reviewed and processed by the lender.

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3 years ago
Kingston Company purchased a piece of equipment on January 1, 2015. The equipment cost $200,000 and had an estimated life of 8 y
DaniilM [7]

Answer:

Annual depreciation= $32,812.5

Explanation:

Giving the following information:

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Annual depreciation= 2*[(book value)/estimated life (years)]

2015:

Annual depreciation= 2*[(200,000 - 25,000) / 8]

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3 0
3 years ago
What type of expense is your rent each month?
Alisiya [41]
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3 0
3 years ago
Read 2 more answers
Based on the corporate valuation model, gray entertainment's total corporate value is $1,150 million. the company's balance shee
vagabundo [1.1K]

Answer:

$26.67 million

Explanation:

The computation of price per share is shown below:-

Total market value = $1,150 million + $120 million

= $1,270 million

Market value of equity = Total market value - value of debt - value of preferred stock

= $1,270 million - ($120 million + $300 million + $50 million)

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= $800 million ÷ $30 million

= $26.67 million

5 0
3 years ago
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