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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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Indirect labor and indirect materials are classified as factory overhead and product costs factory overhead and period costs ope
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Answer:

True

Explanation:

Product costs are the costs directly incurred from the manufacturing process. The three basic categories of product costs they are;

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Manufacturing overhead cost also include the following;

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D. Keep the information to yourself​.

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Lex Corporation is an expanding telecommunications company. However, they are in need of more computers for their new employees.
Kobotan [32]

Answer:

The Answer is Capital.

Explanation:

In Economics, we identify that there are 4 main factors that contribute to the production, we call them "factors of production" and they are,

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So, under which category of factors that the computers fall under? Simple right? Its 3.Capital! because they are assets that are created by humans to aid in enhancing the production capabilities!

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If the inflation rate decreased from 3.33% to 2.90% between October and November, while the nominal interest rate increased from
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Answer:

1.90%

Explanation:

There is the accordance or connection between nominal and real interest rates. It is basically possible to convert from nominal interest rates to real interest rates. According to the Fisher, there is a equation that's called the Fisher Equation:

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