Answer and Explanation:
The computation of the total incremental cost is shown below;
For making 53,500 units
<u>Particulars Relevant Relevant Total </u>
<u> Per Unit Fixed Costs Relevant Costs
</u>
Variable Cost
Per Unit $2.95 $157,825
(53,500 units × $2.95)
Fixed
Manufacturing
Costs $67,000 $67,000
Total Incremental Costs to Make $224,825
For making 53,500 units
<u>Particulars Relevant Relevant Total </u>
<u> Per Unit Fixed Costs Relevant Costs
</u>
Purchase
Price
Per Unit $3.50 $187,250
(53,500 units × $3.50)
Total Incremental Cost to Buy $187,250
The company should buy the component from the outside supplier as it saves the cost for ($224,825 - $187,250) = $37,575 plus the buying cost is less than the making cost
Answer: standing plan
Explanation:
Standing plan is used over a long period of time and is altered as situations change. It also helps in bringing about harmony and consistency to the company.
The plan usually contains goals, policies, methods, dos and don'ts which are otherwise known as rules and strategies of a company.
This plan benefits the managers as it covers the problems they face frequently.
Answer:
The question posted seems to be lacking in giving what the standard costing is in monetary value. However, the formula can be given.
The formula to calculate the standard cost of input:
standard cost of unit (monetary value) multiplied by the standard quantity per unit
For Example:
If the standard cost of unit is $10 then the standard cost of input will be:
$10 x 10 pounds per case
= $100 per case.
Explanation:
To calculate standard cost, you have to understand the definition of standard cost. Standard cost is the estimated cost of production for a business.
Apply the formula given to calculate the the standard cost of input. Once you have that value, you can then calculate the cost of producing a case of roasted coffee beans.
Answer:
$965
Explanation:
Calculation to determine what Ending inventory assuming weighted-average cost would be:
First step is calculate the Weighted-average cost
Weighted-average cost = [(480 x $2.48) + (440 x $2.75)] / (480+440)
Weighted-average cost =1,190.4+1210/920
Weighted-average cost = 2400.4/920
Weighted-average cost =2.6091
Now let determine the Ending inventory
Ending inventory = (920-550) x 2.6091
Ending inventory = 370x 2.6091
Ending inventory =$965
Therefore Ending inventory assuming weighted-average cost would be $965
450 dollars due to him receiving the item for free he would make a 100 percent profit
