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ki77a [65]
3 years ago
12

Part U16 is used by Mcvean Corporation to make one of its products. A total of 13,000 units of this part are produced and used e

very year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $ 2.90 Direct labor $ 7.50 Variable manufacturing overhead $ 8.00 Supervisor's salary $ 3.40 Depreciation of special equipment $ 1.80 Allocated general overhead $ 7.00 An outside supplier has offered to make the part and sell it to the company for $29.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part U16 could be used to make more of one of the company's other products, generating an additional segment margin of $25,000 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part U16 from the outside supplier should be:
Business
1 answer:
ad-work [718]3 years ago
4 0

Answer:

Financial disadvantage of 138,600

Explanation:

\left[\begin{array}{cccc}&produce&buy&Differential\\$Purchase&&-447,000&-447,000\\$Avoidable\: Cost&-283,400&0&283,400\\$Unavoidable\: Cost&-114,400&-114,400&0\\$Total Cost&-397,800&-561,400&-163,600\\$additional segment&0&25,000&25,000\\$Net  Effect&-397,800&-536,400&-138,600\\\end{array}\right]

The allocate cost and teh depreciation cost will be unavoidable, so should be considered as a cost for the purchase option

Also the inocme from teh additional segment is only considered for the purchase option

<u>The avoidable cost will be:</u>

Direct Materials

Direct Labors

Variable overhead

Supervisor

Thse cost are zero in the purchase escenario

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Harris Company uses the allowance method of handling its credit losses. It estimates credit losses at one percent of credit sale
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Answer:

Dec.31           Bad Debts Expense    27000

December 31    Balance Sheet Accounts Receivable             392400

Explanation:

Harris Company

Credit Sales for the current year $2700,000

Credit Losses = 1% of $ 2700,000= $ 27000

Add Allowance for Doubtful Accounts $ 30600 Cr

Required Adjustments          $ 57,600 Cr

General Journal

Date                     Description            Debit                Credit

Dec.31           Bad Debts Expense    27000

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December 31 Balance Sheet.

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Less: Allowance for Doubtful Accounts $57,600 ( 27000+ 30,600)

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6 0
3 years ago
In a recent year Sunland Company had net income of $360000, interest expense of $72000, and a times interest earned of 10. What
Otrada [13]

Answer:

$648,000

Explanation:

Given that;

Net income = $360,000

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4 0
3 years ago
During the year, Kim sold the following assets: business auto for a $1,000 loss, stock investment for a $1,000 loss, and pleasur
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Answer:

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total loss claim = business auto loss + stock investment loss

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Therefore, The Kim may claim $2,000 of these losses.

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3 years ago
While designing a website, a(n) _____ allows you to identify the specific amount of space used on a particular page before it co
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A wireframe would be useful in designing a web page since it would determine the specific amount of space to be allotted for the content to be placed. In addition, it serves as a schematic blueprint which functions as a layout for arranging the elements you want to put on the website.
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3 years ago
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Answer:

Jason's performance appraisal may be unfair due to likeability.

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7 0
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