Answer:
Explanation:
this is called make or buy decision, in this prblem we consider the that are directly related to product which can be avoided by purchasin g from other supplier instead producing it, fix cost irrelevant cost because they will occur whether or not company make production of items.
lets solve the problem as follows
Total Variable Cost :
Material 66950
Labor 56650
Variable O.H 30900
Total 154500
Remotes = 10300
Cost per unit Excluding fix cost= 154500/10300 = 15
Cost per unit Including fix cost= 206000/10300 = 20
1.cost between making and buying the remotes if none of the fixed costs can be avoided
Making Cost = 20
Buying Cost = 18
Differrence = 2
Net income If purchase from outside = 2*10300 = 20600
2. if $20,600 of the fixed costs can be avoided.
Total Cost = 206000
Cost avoided = -20600
Net Cost = 185400
Cost per units = 185400/10300 = 18
the cost of making and buying is equal due to decrease fix cost by 20600.
Change in net income = 20600
3.
Rental Income = 20600
Fix Cost save =20600
41200
An investor purchased 10 go bonds at a discount of 2 points per bond. the bonds mature in 10 years. after holding the bonds for 5 years, they were sold at par. for tax purposes, the investor has a $100 gain.
The cost per bond is $980. The accretion amount each year is $20. $20 ÷ 10 years = $2 per year. $2 per year × 5 years = $10 per bond accretion, making the adjusted cost basis $990 per bond.
When the bonds are sold at par ($1,000), there is a profit of $10 per bond × 10 bonds, which equals a $100 gain.
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