Question 6 of 10

McMurphy Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the produ

larisa [96]

Answer:

Opportunity cost ($481,000) is greater than the total production cost ($356,000). McMurphy corporation should produce the products by itself instead of buying from Conners Company since the production costs are lower than purchase cost

Explanation:

Determine the total cost associated with the production of the units as follows;

T=M+L+V+F

where;

T=total costs

M=direct materials cost

L=direct labor costs

V=variable factory overhead costs

F=fixed factory overhead costs

In our case;

M=$88,000

L=$127,000

V=$59,000

F=$137,000

replacing;

T=(88,000+127,000+59,000+137,000)=$411,000

Total costs=$411,000

Assuming the McMurphy avoids 55,000 fixed factory overhead cost;

Total costs=411,000-55,000=$356,000

The opportunity cost if McMurphy Corporation decides to purchase the units from Conners Company instead of producing them will be;

Opportunity cost=cost per unit×number of units

cost per unit=$37

number of units=13,000 units

Opportunity cost=37×13,000=$481,000

Opportunity cost ($481,000) is greater than the total production cost ($356,000). McMurphy corporation should produce the products by itself instead of buying from Conners Company since the production costs are lower than purchase cost

5 0

4 years ago

First City Bank pays 9 percent simple interest on its savings account balances, whereas Second City Bank pays 9 percent interest

4vir4ik [10]

Answer:

Future value is $14,944.22

Interest earned is $7444.22

Explanation:

The amount to earn from Second City Bank is the interest that would have been received at the end of the eight years,

In order to determine the amount of interest,it would be nice to first of all compute the future value-the worth of the savings at the end of eight year using the below formula:

FV=PV*(1+r)^N

PV is the $7,500 invested

r is the compound rate of return is 9%

N is the number of years the amount was invested which is eight years

FV=$7,500*(1+9%)^8

FV=$ 14,944.22

Hence Interest =FV-PV

=$ 14,944.22 -$7,500

=$7444.22

7 0

3 years ago

The county supervisor is considering building a community pool and has gathered data on how much residents are willing to pay. H

Lesechka [4]

Answer:

C. cost-benefit analysis

Explanation:

Cost - benefit analysis -

It is the method to analyse any decision in a very brief manner , is referred to as cost - benefit analysis .

The cost of the complete business or the project is calculated and analysed with the actual cost used for it .

The method is done with the help of certain models , data , records etc. in order to analyse even the minute details in a proper manner .

Hence , from the given scenario of the question ,

The correct answer is C. cost-benefit analysis .

4 0

3 years ago

Classify Lawlor's costs as period costs or product costs. If the costs are product costs, further classify as direct material

svet-max [94.6K]

product cost ( direct materials,direct labour and manufacturing overheads).

It is a combination of products cost materialize cost on assets and period cost materialist on difference income and expenses in time.please find the attachment on the differences.

Explanation:

Product cost idealizes on inventory, assets to the companies.
It has segregation direct materials product sales.
It has segregation direct labour cost maintaing products.
It has segregation of manufacturing issues with machine for products.
Period cost is an event which happens at certain point of time.
It administrative,commission and significant understanding.
Delivers different set of cost accounting.
It raises issues and exponential cost incurred.

6 0

3 years ago

Nathanial Drummond has three different insurance policies. He has been injured in an accident and has incurred $30,000 in medica

marysya [2.9K]

<span>The answer is D. Major medical insurance.</span>

This usually covers all healthcare including prescription medicine and out-patient costs and even other services like physical therapy and mental health. Unlike basic health care, this kind of insurance sets a limit on your medical expenses, even if you have very costly treatment.

6 0

3 years ago

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