Answer and Explanation:
The computation is shown below;
For Alternative A
Cost to buy new machine -$119,000.00
Cash received $55,000.00
Reduction in variable manufacturing cost ($33400 - $23000) ×5 $52,000.00
Total change in net income -$12,000.00
For Alternative B
Cost to buy new machine -$112,000.00
Cash received $55,000.00
Reduction in variable manufacturing cost ($33400 - $10200) × 5 $116,000.00
Total change in net income $59,000.00
So here Xinhong should purchase a machine that belong from Alternative B.
Answer:
an under applied of $10,300
Explanation:
The computation of the over applied or under applied is shown below;
Difference in overhead = Actual overhead - applied overhead
= $418,900 - ($227,000 × ($401,400 ÷ $223,000))
= $418,900 - $408,600
= $10,300
Since actual overhead is more than the applied overhead so it is an under applied of $10,300
Answer:
(i) $50 and $50.03
(ii) $70
(iii) No
Explanation:
The computations are shown below:
(i). The company average cost would be
= Total cost ÷ number of graphing calculators produced
For 700 graphing calculators
= $35,000 ÷ 700
= $50
For 701 graphing calculators
= $35,070 ÷ 701
= $50.03
(ii) The marginal cost would be
= Total cost at 701st calculator - Total cost at 700th calculator
= $35,070 - $35,000
= $70
(iii) Since we see that the company has a marginal cost of $70 and paying price or marginal revenue is $60 so it will be a loss of $10 in case of sale. So, the company should not produce it.
