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Phantasy [73]
3 years ago
8

Ahrends Corporation makes 70,000 units per year of a part it uses in the products it manufactures. The unit product cost of this

part is computed as follows: Direct materials $ 17.80 Direct labor 19.00 Variable manufacturing overhead 1.00 Fixed manufacturing overhead 17.10 Unit product cost $ 54.90 An outside supplier has offered to sell the company all of these parts it needs for $48.50 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $273,000 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $8.20 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products. How much of the unit product cost of $54.90 is relevant in the decision of whether to make or buy the part?
Business
1 answer:
Lelechka [254]3 years ago
8 0

Answer:

$48.50

Explanation:

Relevant costs are the costs that are influenced by managerial decisions.They are future costs that have the tendency to affect the cash flow or outflow above the current level , that are relevant in making decisions . Examples are opportunity cost , incremental cost

The relevant cost in the scenario is the cost of buying from the supplier instead of in-house manufacturing , which is $48.50

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Telecomp is a U.S.-based manufacturer of cellular telephones. It is planning to build a new manufacturing and distribution facil
neonofarm [45]

Answer:

a. Maximin =  19.0

b. Minimax  = 17.6

c. Hurwicz ( 0.40)  = Taiwan

d. Equal likelihood = Taiwan

Explanation:

Remember, we are told to: Note that since the payoff is cost, the maximax criteria becomes minimax and maximin becomes minimax

a) Maximin: Since the payoff is cost, we begin by determining the maximum cost for each alternative and then selecting the one which gives the minimum of these maximums. (minimax)

b) Minimax: Since the payoff is cost, we begin by determining the minimum cost for each alternative and then selecting the one which gives the maximum of these minimums. (maximin).

c) Hurwicz (0.40): In this method, we add and multiply each payoff value by alpha (0.4).

South Korea = 15.2 (0.4) + 21.7 (0.6) = 19.1 ( remember, in $ millions)

China = 17.6 (0.4) + 19.0 (0.6) = 18.44

Taiwan = 14.9 (0.4) + 19.2 (0.6) = 17.48

Poland = 13.8 (0.4) + 22.5 (0.6) = 19.02

Mexico = 12.5 (0.4) + 25.0 (0.6) = 20

From the values above we select the minimum outcome since the company is looking at saving cost. Which is Taiwan; having the lowest cost of $17.48 million.

d) Using the formula \frac{P_{1} +P_{2}+P_{3}...P_{n}   }{n} where P = payoffs value, n = number of events.

South Korea =  15.2 + 21.7 + 19.1 /3 = 18.66

China = 17.6 + 19.0 + 18.5 /3 = 18.36

Taiwan = 14.9 + 19.2 +17.1 /3 = 17.06

Poland = 13.8 + 22.5 + 16.8 /3 = 17.7

Mexico = 12.5 + 25.0 + 21.2 /3 = 19.56

Taiwan should be selected since it has the lowest cost of $17.06 million.

4 0
2 years ago
The comparative balance sheets for 2021 and 2020 are given below for Surmise Company. Net income for 2021 was $88 million.
Alinara [238K]

It can be deduced that the cash flow shows that the net cash provided by operating activities will be $58 million.

<h3>How to compute the statement of cash flow</h3>

<u>Cash flow from operating activities</u>

Net income = $54 million

Add: Depreciation $15 million.

Add: Bad debt = $6 million

Add: Amortization expense = $3

<u>Changes in operating assets and liabilities</u>

Decrease in account receivable = $4 million

Increase in inventory = ($9 million)

Increase in prepaid expense = ($2 million)

Decrease in account payable = ($10 million)

Decrease in accrued liability = ($3 million)

Net cash provided by operating activities = $58 million

In conclusion, the net cash provided by operating activities is $58 million.

Learn more about cash flow on:

brainly.com/question/735261

8 0
2 years ago
An American student buys an airline ticket on the Royal Dutch Airlines, KLM. This enters the U.S. balance of payments accounts a
viva [34]

Answer:

a

Explanation:

how to make the best of it and I will be there at last minute but I am not sure if I can make it to the meeting tonight but I will be there at last minute.

8 0
2 years ago
Al’s Fine Winery has had workers attempting to ban together to form a union. Al’s wants to avoid letting the workers gain too mu
kogti [31]

Answer:

The correct answer is letter "B": Yellow dog contracts.

Explanation:

Yellow dog contracts are those provided by employers in which they and the new hires agree in employees not engaging any activity related to unions while they are under the company's payroll. Yellow dog contracts attempt to avoid the formation of labor unions so the organizations only will have the power in deciding employee benefits, compensations, and working conditions.  

These types of contracts are considered illegal after the Norris-LaGuardia Act of 1932 was enacted.

3 0
3 years ago
Glasgow Enterprises started the period with 80 units in beginning inventory that cost $7.50 each. During the period, the company
Citrus2011 [14]

Answer:

The cost of ending inventory is $2340

Explanation:

Under the weighted average method of inventory valuation, we value the ending inventory based on the weighted average of all the available inventory for the period. The inventory available for the period includes the beginning inventory plus the purchases for the period.

The weighted average cost of inventory can be calculated by adding the total cost of available inventory and dividing it by total number of units of available inventory.

The weighed average cost of inventory per unit for Glasgow is,

Total cost = 80 * 7.5 + 200 * 9 + 150 * 9.3 + 50 * 10.5  =  $4320

Total number of units = 80 + 200 + 150 + 50  = 480 units

Weighted average cost per unit = 4320 / 480  =  $9 per unit

The units of ending inventory are = 480 - 220 = 260 units

The cost of ending inventory is = 260 * 9 = $2340

3 0
3 years ago
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