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3 years ago

The following standard costs pertain to a component part manufactured by Bor Co.:

Business

1 answer:

larisa [96]3 years ago

3 0

Answer:

Relevant cost= $30

Explanation:

Giving the following information:

Direct materials $4

Direct labor 10

Factory overhead 40

Standard cost per unit $54

Fixed cost is 60% of applied factory overhead, and is not affected by any make or buy decision.

The relevant cost in a "make or buy" decision is the cost that can be avoided. Therefore, the fixed manufacturing cost is not relevant.

Relevant overhead= 40*0.4= $16

Relevant cost= 4 + 10 + 16

Relevant cost= $30

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AudioCables, Inc., is currently manufacturing an adapter that has a variable cost of $0.50 per unit and a selling price of $1.40

Sedaia [141]

Answer: Yes. AudioCable should buy a new equipment

Explanation:

Audiocables Inc. without new equipment:

Selling price: $1.40

Variable cost: $0.50

Fixed cost: $14,000

Sales: 30000 units

Total cost = Fixed cost + Variable cost

= $14000 + ($0.50 × 30000)

= $14000 + $15000

= $29000

Revenue = Sales × Selling price

= 30000 × $1.40

= $42000

Profit = Revenue - Total Cost

= $42000 - $29000

= $13000

Audiocables Inc. with new equipment:

Selling price: $1.40

Variable cost: $0.60

Fixed cost: $14,000 + $6000 = $20000

Sales: 50000 units

Total cost = Fixed cost + Variable cost

= $20000 + ($0.60 × 50000)

= $20000 + $30000

= $50000

Revenue = Sales × Selling price

= 50000 × $1.40

= $70000

Profit = Revenue - Total Cost

= $70000 - $50000

= $20000

From the calculations made, AudioCable buy a new equipment as profit generated is more.

5 0

3 years ago

Sigma Corporation applies overhead cost to jobs on the basis of direct labor cost. Job V, which was started and completed during

murzikaleks [220]

Answer:

$3,283

Explanation:

Calculation for the overhead cost be added to Job W at year-end

Using this formula

Overhead cost =(Overhead cost / Direct Labor) *Job W Direct Labor

Overhead cost=($6,365 / $9,500) *$4,900

Overhead cost=0.67*$4,900

Overhead cost=$3,283

Therefore the overhead cost be added to Job W at year-end is $3,283

4 0

3 years ago

EBook

attashe74 [19]

Answer:

McDade Company

Comparative Income Statement

For the Years Ended December 31, 2012 and 2011

2012 2011 Change %

Sales $16,800,000 $15,000,000 $1,800,000 12%

COGS ($11,500,000) ($10,000,000) $1,500,000 15%

Gross profit $5,300,000 $5,000,000 $300,000 6%

Selling expenses ($1,770,000) ($1,500,000) $270,000 18%

Adm. expenses ($1,220,000) ($1,000,000) $220,000 22%

Operating exp. ($2,990,000) ($2,500,000) $490,000 19.6%

Operating income $2,310,000 $2,500,000 ($190,000) -7.6%

Other revenue $256,950 $225,000 $31,950 14.2%

EBT $2,566,950 $2,725,000 ($158,050) -5.8%

Income taxes ($1,413,000) ($1,500,000) ($87,000) -5.8%

Net income $1,153,950 $1,225,000 ($71,050) -5.8%

6 0

3 years ago

Suppose Kim Ping and Abdel decide to set up a joint venture. Working together, the two companies will build a new, independent m

harina [27]

Answer:

Kim Ping and Abdel will have trouble when it comes to equality in a joint venture. There is always one partner who earns more than the other.

Kim Ping and Abdel will face "conflict of interest." Every individual has his own purpose in making a profit.

Explanation:

"Join venture" refers to the merging of two parties, including their resources, in order to accomplish a project or start a new business. This means that the company profits and losses will be shared by both parties.

However, it is said that "there is no such things as equal partners." There is always a chance that one party will earn more than the other, or the other party will contribute more than the other.

There is also a possibility of "conflict of interest" in such situation. Every partner has his own beliefs and style of running a business. This will cause a conflicting interest in both parties.

These are the possible problems that Kim Ping and Abdel might encounter.

5 0

4 years ago

New Coffee Company, LLC uses JIT (just-in-time) logistical supply methods. This indicates that the company doesn't really keep l

Leona [35]

Answer:

B) Inventory turnover ratios

Explanation:

Inventory turnover measures how many times a business sells and replaces its merchandise or materials inventory during an accounting period, usually a year.

One of the basic goals of JIT is to lower the total inventories in a company, therefore increasing the inventory turnover ratio. This reduces the company's operating costs.

4 0

3 years ago