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IceJOKER [234]
3 years ago
12

Wheeler Company can produce a product that incurs the following costs per unit: direct materials, $10; direct labor, $24, and ov

erhead, $16. An outside supplier has offered to sell the product to Axle for $45. If Wheeler buys from the supplier, it will still incur 45% of its overhead cost. Compute the net incremental cost or savings of buying.
Business
1 answer:
Arada [10]3 years ago
6 0

Answer:

$2.20

Explanation:

Given that,

Direct materials = $10

Direct labor = $24

Overhead = $16

Outside supplier has offered to sell the product to Axle = $45

If Wheeler buys from the supplier, it will still incur 45% of its overhead cost.

Buying cost:

= Offered price + (45% of overhead cost)

= $45 + ($16 × 0.45)

= $45 + $7.2

= $52.2

Net incremental cost:

= Buying cost - Production cost

= $52.2 - (Direct materials + Direct labor + Overhead)

= $52.2 - ($10 + $24 + $16)

= $52.2 - $50

= $2.20

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Division Y of the same company would like to purchase 10,075 units each period from Division X. Division Y now purchases the par
Tanya [424]

Answer:

Unless division X's variable cost of production per unit is higher than $32, which I doubt, then the company is losing money. Division X is not working at full capacity so they have spare capacity to provide the 10,075 units that division Y needs. Obviously the outside supplier is making money when it sells its product at $32, so this scenario is not logical.

7 0
3 years ago
At most movie theaters, one employee sells tickets and another employee collects them. One night, when you’re at the movies, you
Naily [24]

Answer: Division of Labour

Explanation: This is the division of a task or job role into smaller parts between two or more people.

Division of Labour helps to achieve a higher rate of productivity and efficiency.

By having the same person doing both jobs productivity and efficiency is low, because the workload increase on that individual which directly affects his performance on the job.

3 0
3 years ago
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If the reserve ratio is 5 percent, banks do not hold excess reserves, and people do not hold currency, then when the Fed sells $
Keith_Richards [23]

The correct option is: decrease by $20 million and the money supply eventually decreases by $400 million.; if the reserve ratio is 5 percent, banks do not hold excess reserves.

<h3>Define the term reserve ratio?</h3>

The amount of reservable liabilities than commercial reserve requirement onto rather than lend off and invest is known as the reserve ratio.

The central bank of the nation, in this case the Federal Reserve in the United States, sets this criterion. It is often referred to as the ratio of cash reserves.

The amount of money that banks are required to hold with the Reserve Bank of India as a percentage of their Net Time and Demand Liabilities is known as the Cash Reserve Ratio (NDTL).

The goal of CRR is to guarantee the banks' solvency and liquidity.

Thus, if a reserve ratio is 5%, banks do not store extra reserves, and people must not hold currency, the money supply will eventually fall by $400 million and by $20 million.

To know more about the reserve ratio, here

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3 0
1 year ago
Which of the following statements is incorrect with regard to product costs? A. Product costs flow from the balance sheet to the
Rama09 [41]

Answer:

Product costs do not flow from the balance sheet to the income statement.

The correct answer is A.

Explanation:

Product costs flow from the income statement to the balance sheet.

Unlike direct material and direct labour cost, overhead cost must be allocated to products using a suitable basis.

Product costs are expensed in the period incurred in the income statement.

Depreciation on manufacturing equipment is an indirect product cost because it is not directly traceable to a cost unit or cost center.

5 0
4 years ago
Budgeting, ethics, pharmaceutical company. Chris Jackson was recently promoted to Controller of Research and Development for Bri
OleMash [197]

Answer:

BrisCor

Budgeting, ethics, pharmaceutical company

a. Referring to the "Standards of Ethical Behavior for Practitioners of Management Accounting and Financial Management,"

none of the preceding items are acceptable to use.

b. I would recommend Jackson to go ahead with the R&D throughout the year to ensure that the drug Vyacon was successfully brought to the market next year before the competitor.  He can try to keep to the budget going forward.  A budget remains a budget and not the actual.  Budget overrun can result.  What is important is its effectiveness in achieving business goals.

Explanation:

The announced expectations of third-quarter earnings to Wall Street analysts should not prevent the R&D on the drug Vyacon from continuing, provided Jackson is certain that the envisaged success would be attained.  They remain expectations.  They are not the actual results of operations for the year. Even if the company's stock price would tumble, it would still recover after the drug had received approval and gone to market, raking in large profits.  After all, the projected increase in R&D cost might not result, and the drug Vyacon could be fully developed and ready for the market before year-end, thereby not exceeding its budget.

7 0
3 years ago
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