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navik [9.2K]
3 years ago
11

Troy Engines, Ltd., Manufactures A Variety Of Engines For Use In Heavy Equipment. The Company Has Always Produced All Of The Nec

essary Parts For Its Engines, Including All Of The Carburetors. An Outside Supplier Has Offered To Sell One Type Of Carburetor To Troy Engines, Ltd., For A Cost Of $31 Per Unit. To Evaluate This Offer, Troy Engines, Ltd., ...
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Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $31 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally:



Per Unit 15,000 Units
Per Year
Direct materials $ 9 $ 135,000
Direct labor 11 165,000
Variable manufacturing overhead 2 30,000
Fixed manufacturing overhead, traceable 6* 90,000
Fixed manufacturing overhead, allocated 13 195,000
Total cost $ 41 $ 615,000
*40% supervisory salaries; 60% depreciation of special equipment (no resale value).


Required:
1a.
Assuming that the company has no alternative use for the facilities that are now being used to produce the carburetors, compute the total cost of making and buying the parts. (Round your Fixed manufacturing overhead per unit rate to 2 decimals.)
Business
1 answer:
Molodets [167]3 years ago
8 0

Answer:

Total relevant cost for making the parts =$387,400

Total relevant cost for buying the parts = $465,000

Explanation:

The computation of total cost of making and buying the parts is shown below:-

                                           Make         Buy

Cost of purchasing             0               $465,000

                                                            (15,000 × $31)

Direct material                $135,000     0

Direct labor                     $165,000     0

Variable manufacturing

overhead                          $30,000     0

Fixed manufacturing

overhead                          $57,240     0

Total relevant cost           $387,400     $465,000

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2 years ago
Rice Corp. recognizes revenue over time to account for long-term contracts and has the following information for the first year
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Answer:

D.) $75,000

Explanation:

Amount of revenue recognized = Cost incurred to date / Estimated total cost * Contract price

Cost incurred to date=60,000

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8 0
3 years ago
Foster, Inc., purchased a truck by paying $5,000 and borrowing the remaining $30,000 required to complete the transaction. Ident
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3 years ago
You and your twin sister, both 18 years of age, were in a car accident. She had a clean break across the humerus and the upper a
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Answer:

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3 years ago
Assume Ireland and Mali can both produce grain and dates, and that the only limited resource is the farming labor force, meaning
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Answer:

a. Which country has the absolute advantage in producing dates?

Mali

b. Which country has the absolute advantage in producing grain?

None

c. Which country has the competitive advantage in producing dates?

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d. Which country has the comparative advantage in producing grain?

Ireland

Explanation:

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