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zavuch27 [327]
2 years ago
15

Cruise Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part

, assuming a production level of 6,000 units, are as follows:
Direct Materials $4.00
Direct Labor $4.00
Variable manufacturing overhead $3.00
Fixed manufacturing overhead $1.00
Total Cost $12.00

The fixed overhead costs are unavoidable.

Assume Cruise Company can purchase 6300 units of the part from Suri Company for $14.20 each, and the facilities currently used to make the part could be used to manufacture 6300 units of another product that would have an $13 per unit contribution margin. If no additional fixed costs would be incurred, what should Cruise Company do?
Business
1 answer:
saul85 [17]2 years ago
3 0

Answer and Explanation:

Here we choose between the making and buying decision

The making cost is

= Direct material per unit + direct labor per unit + variable manufacturing overhead per unit

= $4 + $4 + $3

= $11

And, the buying cost is $14.20

So Cruise company should make the part and save the $3.20 cost i.e. come from

= $14.20 - $11

= $3.20

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7 0
3 years ago
The following income statement was produced when volume of sales was at 400 units. Sales Revenue $ 1,600 Variable Cost 700 Contr
lilavasa [31]

Answer:

If volume reaches 500 units, net income will be: $715

Explanation:

When  volume of sales was at 400 units:

Selling price per unit = Sales Revenue/400 = $1,600/400 = $4

Variable Cost per unit = Variable Cost/400 = $700/400 = $1.75

If volume reaches 500 units:

Total Sales Revenue = $4 x 500 = $2,000

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Fixed Cost will not change = $410

Net income = Total Sales Revenue - Variable Cost - Fixed Cost = $2,000 - $875 - $410 = $715

7 0
3 years ago
You start with 100 units and end with 150 units, what is the percentage increase?
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150 - 100 = 50 units

After that, you need to do this calculation:

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6 0
3 years ago
An operating lease:_______
gogolik [260]

Answer: The correct answer is "b) the lessor records a receivable for the present value of lease payments.".

Explanation: In an operating lease <u>the lessor records a receivable for the present value of lease payments.</u>

In this case, only the lessor must register its credit with the lessee because the operating leases are determined as financing outside the balance sheet, therefore a leased asset and associated liabilities of future rental payments should not be presented in the general balance of a company, with the objective of keeping the debt to capital ratio low.

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Suppose that the manager of a restaurant has two new employees, Rahul and Henriette, and is trying to decide which one to assign
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Answer:

a. Who should be assigned to chop vegetables?

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Explanation:

we need to determine the opportunity cost of each employee:

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Rahul's opportunity cost of washing 1 dish per hour = 20 / 100 = 0.2 pounds of chopped vegetables.

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Henriette's opportunity cost of washing 1 dish per hour = 30 / 120 = 0.25 pounds of chopped vegetables.

Rahul should wash dishes while Henriette should chop vegetables because their opportunity cost of performing these activities is lower.

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