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Ket [755]
2 years ago
14

Han Products manufactures 22,000 units of part S-6 each year for use on its production line. At this level of activity, the cost

per unit for part S-6 is:
Direct materials $5.60
Direct labor 6.00
Variable manufacturing overhead 3.60
Fixed manufacturing overhead 12.00
Total cost per part $27.20
An outside supplier has offered to sell 22,000 units of part S-6 each year to Han Products for $44.50 per part. If Han products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $551,600. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier.
Required:
a. Calculate the per unit and total relevant cost for buying and making product. Round per unit answer to 2 decimal place.
b. How much will profits increase or decrease if the outside suppliers offer is accepted?
Business
1 answer:
balu736 [363]2 years ago
5 0

Answer:

Profit decrease = $6,000

Explanation:

As per the data given in the question,

a)

Calculation for buying and making product :

Particulars                Per unit Differential cost           22,000 units

                                    Make          Buy                             Make         Buy

Cost of buying                            $44.50                                         $979,000

Cost of making :

Direct material           $5.60                                          $123,000

Direct labor              $6.00                                           $132,000

Variable manufacturing

overhead                  $3.6                                              $79,200

Fixed manufacturing

overhead                  $4                                               $88,000

                          ($12 × 1 ÷ 4)

Opportunity cost                                                          $551,600

Total cost                $19.2    $44.50                             $973,800  $979,000

b) As we can see that the Profit is decrease by $6,000 in case of outside supplier offer accepted  by taking the difference between the making and buying cost i.e

=  $979,000-$973,800

= $6,000

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Answer:

$205,200

Explanation:

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Wal-Mart was one of the most successful firms of the 1970s and 1980s. Much of Wal-Mart's success can be credited to its expansio
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Answer:

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Explanation:

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I looked for similar questions to fill in the blanks:

If you deposit $2,400 and the required reserve ratio is 0.4, then by how much does the money supply increase?

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The determination of the transaction price for this contract for Nair Corp. is as follows:

Completed by Probability:

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August 1, 2015                  70%                 $150,000         $105,000 ($150,000 x 70%)

August 8, 2015                 20%                 $50,000             -10,000

August 15, 2015                 5%                  $50,000              -2,500

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Total transaction price = $1,135,000 ($1,000,000 + $135,000).

<h3>What is a transaction price?</h3>

A transaction price is the amount of consideration expected to be paid or received for the exchange of goods or services.

A transaction price can vary based on timing or performance factors.

<h3>Data and Calculations:</h3>

Contract value = $1,000,000

Performance bonus = $150,000

Penalty per week in performance bonus = $50,000

The total transaction price is <u>$1,135,000</u>.

Learn more about contract transaction prices at brainly.com/question/984979

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The maker. Hope this helps. :)
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