Rundle Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (15,000 Units x $13) Labor (15,000 Units x $25) Depreciation on manufacturing equipment* Salary of supervisor of engine production Rental cost of equipment used to make engines Allocated portion of corporate-level facility-sustaining costs Total cost to make 15,000 engines *The equipment has a book value of $107,000 but its market value is zero. Required $ 195,000 375,000 40,000 74,000 19,000 80,000 $ 783,000 a. Determine the maximum price per unit that Rundle would be willing to pay for the engines. b. Determine the maximum price per unit that Rundle would be willing to pay for the engines, if production increased to 18,000 units. (For all requirements, Round your answers to 2 decimal places.) a. Maximum price per unit b. Maximum price per unit

Rundle Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (15,000 Units x $13) Labor (15,000 Units x $25) Depreciation on manufacturing equipment* Salary of supervisor of engine production Rental cost of equipment used to make engines Allocated portion of corporate-level facility-sustaining costs Total cost to make 15,000 engines *The equipment has a book value of $107,000 but its market value is zero. Required $ 195,000 375,000 40,000 74,000 19,000 80,000 $ 783,000 a. Determine the maximum price per unit that Rundle would be willing to pay for the engines. b. Determine the maximum price per unit that Rundle would be willing to pay for the engines, if production increased to 18,000 units. (For all requirements, Round your answers to 2 decimal places.) a. Maximum price per unit b. Maximum price per unit

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 1PB: Classify costs Cromwell Furniture Company manufactures sofas for distribution to several major...

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Levesque Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (20,000 Units × $26) $ 520,000 Labor (20,000 Units × $20) 400,000 Depreciation on manufacturing equipment* 42,000 Salary of supervisor of engine production 85,000 Rental cost of equipment used to make engines 23,000 Allocated portion of corporate-level facility-sustaining costs 80,000 Total cost to make 20,000 engines $ 1,150,000 *The equipment has a book value of $90,000 but its market value is zero.Required Determine the maximum price per unit that Levesque would be willing to pay for the engines. Determine the maximum price per unit that Levesque would be willing to pay for the engines, if production increased to 24,000 units.
Rundle Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. Cost of materials (13,400 Units × $16) $ 214,400 Labor (13,400 Units × $17) 227,800 Depreciation on manufacturing equipment* 26,000 Salary of supervisor of engine production 76,000 Rental cost of equipment used to make engines 10,000 Allocated portion of corporate-level facility-sustaining costs 86,000 Total cost to make 13,400 engines $ 640,200 *The equipment has a book value of $96,000 but its market value is zero. Required Determine the maximum price per unit that Rundle would be willing to pay for the engines. Determine the maximum price per unit that Rundle would be willing to pay for the engines, if production increased to 18,050 units?
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1. Reveille, Inc., purchased Machine #204 on April 2021, and placed the machine into production on April 3, 2021. The following information is relevant to Machine #204:Price P60,000Freight-in costs 2,500Preparation and installation costs 3,900Labor costs during regular production operation 10,200Credit terms 2/10, n/30Total productive output 138,500 unitsThe company expects that the machine could be used for 10 years, after which the salvage value would be zero. However, Reveille, Inc., intends to use the machine only eight years, after which it expects to be able to sell it for P9,800. The invoice for Machine #204 was paid April 10, 2021. The number of units produced in 2021 and 2022 were 23,200 and 29,000, respectively. Reveille computes depreciation to the nearest whole month.Required Compute the depreciation for the years indicated, using the following methods (round your answer to the nearest peso): 1. 2021: Units of productions2. 2022: Sum-of-the-years’- digits method 2. The…
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Manny Company uses many kinds of machines in its operations. The following information relates to a machine that was acquired at the beginning of the current year: Cash paid for machine, including VAT of P96,000 Cost of transporting machine Labor cost of installation by expert fitter Labor cost of testing machine Insurance cost for the current year Cost of training for personnel who will use the machine Cost of safety rails and platform surrounding machine Cost of water device to keep machine cool Cost of adjustment to machine to make it operate more efficiently Estimated dismantling cost to be incurred as required by contract 896,000 30,000 50,000 40,000 15,000 25,000 60,000 80,000 75,000 65,000 What total amount should be capitalized as cost of the machine?
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