5.2 Baker Inc. has approached Division B and has offered to sell 5,000 units of the part for $18 per unit. Division the part from Baker Inc. or transfer it from Division A. How much does the overall profit of Johnson Inc. increase or decrease if Division B accepts Baker's offer and declines to transfer any units from Division A. can either purchase
Q: 2.4. The Boss speaker has decided to sell its new Soudlink at a price of £300 per unit. The variable…
A: Break even point refers to that point in which one can cover its fixed costs and variable cost…
Q: 19-52 Transfer Pricing; Ethics Zen Manufacturing Inc. is a multinational firm with sales and…
A: According to the above question: To calculate the effect of Zen's total tax burden we need to take…
Q: please solve the sub-parts to be solved. thanks Ziggy Creations makes and sells a single product.…
A: The contribution margin is calculated as difference between sales and variable costs.
Q: Q3: Al-Khour group owns two subsidiaries North and South. North produces and sells Woods; the cost…
A: Transfer pricing is one of the technique or methodology being used for calculating prices at which…
Q: 5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of…
A: Lets understand the basics. When there is option to either make or buy product then management try…
Q: Raven Corporation received an offer from an exporter for 28,000 units of product at $17 per unit.…
A: Lets understand the basics. When there is special order received from the other party then there is…
Q: How do I calculate the contribution margin for this problem (E21-21)?
A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…
Q: Maize Company incurs a cost of $35 per unit, of which $20 is variable, to make a product that…
A: Relevant cost per unit = Variable cost per unit + Additional costs per unit to imprint a logo = $20…
Q: The machining division is currently selling 2,080 units to outside customers, and the assembly…
A: Free Capacity available = 2280-2080 = 200 units
Q: It costs Ghala Company OMR 13 of variable and OMR 6 of fixed costs to produce one unit which…
A: The answer is option (e.) [i.e OMR 3,000 Increase] Refer step 2 for explanation
Q: 2. What would be the maximum purchase price acceptable to Silven Industries? (Do not round…
A:
Q: Kando Company incurs a $9 per unit cost for Product A, which it currently manufactures and sells for…
A: Definition: Manufacturing businesses: This is a business that buys raw materials, processes those to…
Q: Contribution Margin of Walls Corporation, Consumer division isRs. 1900,000 and the fixed expenses is…
A: Formula: Contribution margin = Sales - variable cost Deduction of variable cost from sales value…
Q: Acre is operating at full capacity. Acre sells its product to outside at 100 per unit with VC of 60…
A: Corporate profit will effect if our supplier's price is higher compare to other supplier then our…
Q: Buchanan Company currently sells 4,000 units of product Q for $1 each. Capacity is 5,000 units.…
A: Increase (decrease) in income = (Unit sales price for offer - Unit variable cost) x no. of units -…
Q: 1. Hems Manufacturing incurs annual fixed costs of P250,00oo in producing and selling a single…
A: Here in this question, we are required to calculate how much maximum variable cost per unit hems can…
Q: 2. Profit To produce 1 unit of a new product, a company determines that the cost for material is…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Cheapo Computers shipped two servers to its biggest client. Four refurbished computers were…
A: There are three possibilities of profits here. We have to find the expected profit and the standard…
Q: Wisconsin Snowmobile Corp. is considering a switch to level production. Cost efficiencies would…
A: For making the corporation profitable, it is important to make a financial analysis regarding the…
Q: 5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of…
A: Make/Buy Decision Whether company should purchase the products from the supplier or should make the…
Q: For (3)-(6) below, assume that the Pulp Division is currently selling only 30,000 tons of pulp each…
A: Full capacity = 50,000 Current capacity = 30,000
Q: Structuring a Special-Order Problem The Millenium Company has been approached by a new customer…
A: Fixed cost are not relevant for decision making. Here we should fallow incremental approach to…
Q: SCM Company currently sells a camera for P12,000. An aggressive competitor has announced plans for…
A: Target cost is the cost to achieve target sale price. Under target costing estimation of product…
Q: Stryker Industries received an offer from an exporter for 23,000 units of product at $16 per unit.…
A: Income = Sales - Relevant cost Fixed manufacturing cost is the sunk cost hence not considered
Q: Redlands Inc. sells one product for $5. The variable cost per item is $3, and the fixed costs for…
A: The differential analysis is performed to analyse the different alternatives available to the…
Q: Amalgamated Fenderdenter’s sales are $10 million. The company spends $3.5 million for purchase of…
A: As per the given data of sales and cost, the following computations are done.
Q: Need explanation for the answer
A:
Q: 5. Andy Company, which produces and sells a single product, has provided the following data: Sales…
A: After operating expenses have been deducted, the amount of profit realised from a business's…
Q: XYZ Company incurs costs of $ 30 per unit ($18 variable and $12 fixed) to make a product that…
A: Net income is the amount earned by an entity after deducting all the outlays from the revenues.
Q: Multiverse currently sells both products at the split-off point. If Multiverse makes decisions which…
A: Calculation of Profit is products are sold at split off Point Particulars Product A Product B…
Q: Problem 2 - Leslie Company sells products X, Y and Z. Sales mix are 3 units of X for each unit of Z,…
A: Product sales mix:- X=3units Y=6 units Z=1unit Z:X:Y-1:3:6 Let units of product: X: 3x Y:6x Z:1x…
Q: . Ginger Corp. sells a product for P5 per unit. The fixed expenses are P210,000 and the unit…
A: Fixed expenses (F) = P 210,000 Variable expenses (V) = 60% Sales = X Profit =10% of X = 0.10X
Q: Sparrow Co. is currently operating at 80% of capacity and is currently purchasing a part used in its…
A: Differential cost means diff. between the cost of two alternative decisions i.e. either the firm has…
Q: 17. Jolo Corporation wants to revise the sales commission payment scheme. Currently, the 4 sales…
A: Lets understand the basics. For calculating indifference point between two option we need to use…
Q: Buenos Company has two divisions, Division X and Division Y. Division X has a production capacity of…
A: Calculation of Spare Capacity In the given question, Division X has production capacity of 6,000…
Q: Stryker Industries received an offer from an exporter for 30,000 units of product at $19 per unit.…
A: Income per unit from acceptance of offer = Selling price per unit - Variable cost per unit = $19 -…
Q: Jacoby Company received an offer from an exporter for 20,500 units of product at $19 per unit. The…
A: Solution:- Introduction:- Basic information as follows: Jacoby Company received an offer from an…
Q: A sale manager of Nepa Co. Ltd has been approached by a overseas company to purchase 10,000 units of…
A: The determination of Cost and profit to decide the profitability of the special order is shown…
Q: Nowitzki Corporation sells sets of encyclopedias. Nowitzki sold 4,000 sets last year at ₱25,000 a…
A: Degree of operating leverage (DOL): DOL reflects variable and fixed cost relationship of an…
Q: 1. an industrial equipment company assumes that their crane model adds $10,000 in lifetime…
A: Let us assume that company crane model price is $82,000.(we take price of equivalent competitor…
Q: Product W can be sold at the split-off point for P5.60 per unit. Product P either can be sold at the…
A: To compute the change in monthly net operating income, the sale value at split off point is to…
Q: n organization's break-even point is 4,000 units at a sales price of $50 per unit, variable cost of…
A: Step 1 Break even point is the production level at which total revenues for a product equal total…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?Cinnamon Depot bakes and sells cinnamon rolls for $1.75 each. The cost of producing 500,000 rolls in the prior year was: At the start of the current year, Cinnamon Depot received a special order for 18,000 rolls to be sold for $1.50 per roll. The company estimates it will incur an additional $1,000 in total fixed costs in order to lease a special machine that forms the rolls in the shape of a heart per the customers request. This order will not affect any of its other operations. Should the company accept the special order? (Show your work.)Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
- Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shell. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320.000. However, the $130 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order? A. Profits will decrease by $1,200. B. Profits will increase by $31,200. C. Profits will increase by $600. D. Profits will increase by $7,200.A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per year for reworking products. What is a good estimate of non-value-added costs? a. 126,000 b. 70,000 c. 56,000 d. 130,000This year, Hassell Company will ship 4,000,000 pounds of chocolates to customers with total order-filling costs of 900,000. There are two types of customers: those who order 50,000 pound lots (small customers) and those who order 250,000 pound lots (large customers). Each customer category is responsible for buying 1,500,000 pounds. The selling price per pound is 2 per lb for the 50,000 pound lot and 3 per lb for the larger lots, due to differences in the type of chocolate. ABC would likely assign order-filling costs to the customer type as follows: a. 450,000, small; 450,000, large (using pounds as the driver) b. 360,000, small; 540,000, large (using revenue as the driver) c. 750,000, small; 150,000, large (using number of orders as the driver) d. 450,000, small; 450,000, large (using customer type as the driver)
- Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?Remarkable Enterprises requires four units of part A for every unit of Al that it produces. Currently, part A is made by Remarkable, with these per-unit costs in a month when 4,000 units were produced: Variable manufacturing overhead is applied at $1.60 per unit. The other $0.50 of overhead consists of allocated fixed costs. Remarkable will need 8,000 units of part A for the next years production. Altoona Corporation has offered to supply 8,000 units of part A at a price of $8.00 per unit. If Remarkable accepts the offer, all of the variable costs and $2,000 of the fixed costs will be avoided. Should Remarkable accept the offer from Altoona Corporation?Jonfran Company manufactures three different models of paper shredders including the waste container, which serves as the base. While the shredder heads are different for all three models, the waste container is the same. The number of waste containers that Jonfran will need during the following years is estimated as follows: The equipment used to manufacture the waste container must be replaced because it is broken and cannot be repaired. The new equipment would have a purchase price of 945,000 with terms of 2/10, n/30; the companys policy is to take all purchase discounts. The freight on the equipment would be 11,000, and installation costs would total 22,900. The equipment would be purchased in December 20x4 and placed into service on January 1, 20x5. It would have a five-year economic life and would be treated as three-year property under MACRS. This equipment is expected to have a salvage value of 12,000 at the end of its economic life in 20x9. The new equipment would be more efficient than the old equipment, resulting in a 25 percent reduction in both direct materials and variable overhead. The savings in direct materials would result in an additional one-time decrease in working capital requirements of 2,500, resulting from a reduction in direct material inventories. This working capital reduction would be recognized at the time of equipment acquisition. The old equipment is fully depreciated and is not included in the fixed overhead. The old equipment from the plant can be sold for a salvage amount of 1,500. Rather than replace the equipment, one of Jonfrans production managers has suggested that the waste containers be purchased. One supplier has quoted a price of 27 per container. This price is 8 less than Jonfrans current manufacturing cost, which is as follows: Jonfran uses a plantwide fixed overhead rate in its operations. If the waste containers are purchased outside, the salary and benefits of one supervisor, included in fixed overhead at 45,000, would be eliminated. There would be no other changes in the other cash and noncash items included in fixed overhead except depreciation on the new equipment. Jonfran is subject to a 40 percent tax rate. Management assumes that all cash flows occur at the end of the year and uses a 12 percent after-tax discount rate. Required: 1. Prepare a schedule of cash flows for the make alternative. Calculate the NPV of the make alternative. 2. Prepare a schedule of cash flows for the buy alternative. Calculate the NPV of the buy alternative. 3. Which should Jonfran domake or buy the containers? What qualitative factors should be considered? (CMA adapted)
- Thaler Company bought 26,000 of raw materials a year ago in anticipation of producing 5,000 units of a deluxe version of its product to be priced at 75 each. Now the price of the deluxe version has dropped to 35 each, and Thaler is now deciding whether to produce 1,500 units of the deluxe version at a cost of 48,000 or to scrap the project. What is the opportunity cost of this decision? a. 175,000 b. 375,000 c. 48,000 d. 26,000A company produces two products. E and F in batches of 100 units. The production and cost data are: The company can only perform 12,000 set-ups each period yet there is unlimited demand for each product. What is the differential profit from producing product E instead of product F for the year? A. $216,000 B. $204,000 C. $12,000 D. $54,000Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.