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3 years ago

Outsourcing (Make-or-Buy) Decision

Business

1 answer:

ivann1987 [24]3 years ago

7 0

Answer:

If the company makes the units, it will save $7,000 per period.

Explanation:

Giving the following information:

Make in-house:

Number of units= 16,000

Variable cost per unit= $22

Avoidable fixed cost per unit= $3

Buy:

Number of units= 16,000

Buying price= $27

Rent= $25,000

First, we will determine the total cost of each option:

Make:

Total cost= 16,000*(22 + 3)= $400,000

Buy:

Total cost= 16,000*27 - 25,000= $407,000

If the company makes the units, it will save $7,000 per period.

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Locus Company has total fixed costs of $118,000. Its product sells for $55 per unit and variable costs amount to $39 per unit. N

Dmitriy789 [7]

Answer:

8,850 units

Explanation:

We know that

Net income = Unit sales × (Selling price per unit - variable cost per unit) - Fixed cost

$23,600 = Unit sales × ($55 - $39) - $118,000

$23,600 = Unit sales × $16 - $118,000

$23,600 +$118,000 = $16 unit sales

So, unit sales = 8,850 units

The net income is computed below:

= Given percentage × Total fixed cost

= 20% × $118,000

= $23,600

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3 years ago

What is the best source of information to use when purchasing a new car?

Elza [17]

Unpaid reviews on reputable car sites.

social media spreads lies, car salesman might lie about the car in order to make a sale, and an ad will do the same.

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3 years ago

The steam requirements of a manufacturing facility are being met by a boiler whose rated heat input is 5.5 × 106 Btu/h. The comb

e-lub [12.9K]

Solution:

Given Information,

Heat input is ( $Q_{in}$ ) = 5.5 × $10^{6}$ Btu/h

Combustion efficiency of the boiler ( $n_{furnance}$ ) = 0.7

Combustion efficiency after turn up ( $n_{furnance,now}$ ) = 0.8

Operation Hour (t) = 5200h

Unit cost (c) = $\frac{23 dollar}{10^{6}Btu }$

Calculate heat output from the boiler $Q_{out}$ = $Q_{in}$ x $n_{furnance}$

= 5.5 x $10^{6}$ x 0.7

= 3.85 x $10^{6}$ Btu/h

Calculate the heat input to the boiler after the tune-up

$(Q_{in} ){new}$ = $Q_{out}$ / $(n_{furnance} ){new}$

= 3.85 x $10^{6}$ / 0.8

= 4.8125 x $10^{6}$ Btu/h

Calculate the saved energy after the tune-up

$(Q_{in} ){saved}$ = $Q_{in}$ - $(Q_{in} ){new}$

= 5.5 x $10^{6}$ - 4.8125 x $10^{6}$ Btu/h

= 0.6875 x $10^{6}$ Btu/h

Calculate the annual energy saving ( $E_{Saving}$ )

$E_{Saving}$ = $(Q_{in} ){saved}$ x t

= ( 0.6875 x $10^{6}$ Btu/h ) ( 5200 hr/yr)

= 3575 x $10^{6}$ Btu/h

Calculate the annual cost saving

Annual cost saving = $E_{Annual saving}$ x Unit cost

= 3575 x $10^{6}$ Btu/h x $\frac{23 dollar}{10^{6}Btu }$

= 82225

4 0

3 years ago

Adams Company manufactures two products. The budgeted per-unit contribution margin for each product follows: Super Supreme Sales

vagabundo [1.1K]

Answer:

Expected contribution as per sales mix = $37*0.60 + $50*0.40

= $22.20 + $20

= $42.20 per unit

Total number of products in total at break even point = Total fixed cost / Contribution per unit

= $227,880 / $42.20 per unit

= 5,400 units

How many units each of Super and Supreme must Adams sell to break even?

According to sales mix:

Super = 5,400 * 60% = 3,240 units

Supreme = 5,400 * 40% = 2,160 units.

3 0

3 years ago

Grain's alternative corporation has a predicted operating income of 80,000. The managerial accountant reported that total variab

dexar [7]

Answer:

Number of units needed to reach the operating income of 80,000: 5,200 units

Explanation:

Please find the below for detailed calculations and explanations:

To achieve $80,000 of operating income, denote the number of units needs to be sold is x.

For each unit sold, the incremental in profit will be 20.

Thus, to achieve the profit of 80,000, the amount of x units sold will generate the profit before fixed cost that covers 24,000 fixed cost and 80,000 targeted profit. So, we have:

80,000 + 24,000 = 20x <=> x = 5,200 units.

* For quick calculation purpose, we may apply the formular: Units need to be sold to achieve targeted income = (Fixed cost + targeted income)/ Contribution margin per unit in monetary form.

8 0

3 years ago