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grandymaker [24]
3 years ago
5

Foster Industries manufactures 20,000 components per year. The manufacturing cost of the components was determined as follows: D

irect materials $150,000 Direct labor 240,000 Inspecting products 60,000 Providing power 30,000 Moving materials 20,000 Setting up equipment 60,000 Providing supervision 40,000 Total $600,000 If the component is not produced by Foster, inspection of products and provision of power costs will only be 10% of the current production costs; moving materials costs and setting up equipment costs will only be 50% of the production costs; and supervision costs will amount to only 40% of the production amount. An outside supplier has offered to sell the component for $25.50. What is the effect on income if Foster Industries purchases the component from the outside supplier? Question 6 options: $90,000 increase $90,000 decrease $45,000 increase $25,000 increase
Business
1 answer:
olasank [31]3 years ago
3 0

Answer:

$25,000 increase

Explanation:

Cost of Manufacturing                                                           Amount

Direct Materials                                                                    $150,000.00

Direct Labor                                                                          $240,000.00

Inspecting products                            60,000 x 0.90              $54,000.00

Providing Power                       30,000 x 0.90                      $27,000.00

Providing Supervision           40000 x 0.60                              $24,000.00

Setting up Equipment                    60000 x 0.50              $30,000.00

Moving Materials                           20,000 x 0.50               $10,000.00

Total                                                                                    $535,000.00

Buying Cost                                  (20000 x 25.50)             $510,000.00

Incremental Saving by Purchase ( $535000-$510000)      $25,000.00

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Answer:

Cognitive dissonance

Explanation:

Cognitive dissonance is a psychological notion when an individual experiences thoughts and emotions that are not consistent (no matter the environment). In this example, it was expected from Fatima to quit her job (since she hated the manager). In spite of that, she continued to work. That caused the cognitive dissonance in her behavior, as she changed her attitude.

6 0
3 years ago
Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
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Answer:

$155,700

Explanation:

Absorption costing

Sales $164 × 3,260 = $534,640

Less cost of goods sold

Opening inventory

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[3,700 × ($51 + $32 + $6 = $89)] = $329,300

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$88,800

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Less ending inventory 440 × $89

$39,160

Cost of goods sold

$378,940

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8 0
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Explanation:

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A                  1           600         $1.00              $0.80                $480

B                  1           250         $1.50               $1.55                $375

C                 2           150         $5.00              $5.25                $750

D                 2           100         $6.50              $6.40               $640

E                 3             80       $25.00           $24.60             $1,968

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when you are using the lower of cost or net realizable value to determine the value of your inventory, you should calculate the inventory's value using the lowest cost between purchase cost and market value.

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