Crown Company, which needs 10,000 units of a certain part to be used in its production cycle, can make or buy the part. If Crown buys the part from Utica Company, Crown could not use the released facilities in another manufacturing activity within the coming year. 60% of the fixed overhead applied will continue regardless of which decision option is chosen. The following per-unit cost information to make the part by Crown is available:   Direct materials $ 23 Direct labor 41 Variable overhead 29 Fixed overhead applied 15   $ 108 Cost to buy the part from Utica Company $ 104   In deciding whether to make or buy the part, Crown's total relevant cost to make the part would be:

Q: Part E43 is used in one of Ran Corporation's products. The company's Accounting Department reports…

A:

Q: Items 1 and 2 are based on Kingston Company, which needs 10,000 units of a certain part to be used…

A: Total factory overhead applied = factory overhead  per unit x No. of units = 15 x 10000  = P150,000

Q: Han Products manufactures 30,000 units of part S-6 each year for use on its production line. At this…

A: Avoidable fixed manufacturing overhead per unit = total fixed manufacturing overhead per unit -…

Q: Genent's Engine Company manufactures part TE456 used in several of its engine models. Monthly…

A: Avoidable  cost = Direct material  ,labor  ,variable overhead  and 8% of fixed overhead

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A: When a business has to choose between two alternatives one is purchasing from outside and other is…

Q: Charge Company manufactures a part for its production cycle. The annual costs per unit for 5,000…

A: Total units = 5,000 Purchase price per unit = $15

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A: Relevant unit product costs = Direct material + direct labor + variable manufacturing overhead +…

Q: The Park Avenue Corporation currently makes a part required in its finished product.  The company…

A: Manufacturing Cost: Manufacturing costs are the cost which is incurred for producing or…

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A: While making decisions, whether to manufacture a component or outsource it, the fixed cost has a…

Q: ABC Company manufactures Part AA for use in its production cycle.  The costs per unit for 25,000…

A: Relevant cost to Make  Amount (in P)  Direct materials (25,000 units X P 7.50 per unit)…

Q: ABC Manufacturing Corp. is using 10,000 units of part no. 300 as a component to assemble one of its…

A: Make or Buy decisions are referred to as taking decision regarding either to produce the product…

Q: Pumpkin Company needs 20,000 units of a certain part to use in one of its products. The following…

A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…

Q: Plummer Company makes 4,000 units per year of a part called an axial tap for use in one of its…

A: Formulas:

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A: Make or buy decision: This type of decision is generally considered when a component can be bought…

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A: Relevant cost to make = Direct materials + Direct labor + Variable manufacturing overhead +…

Q: Travers Company is contemplating the acceptance of a special order has the following unit cost…

A: In a decision to accept or reject an order, the fixed costs are ignored or not considered as they…

Q: Kingston Company, which needs 10,000 units of a certain part to be used in its production cycle, can…

A: Unavoidable fixed is a sunk cost and not considered in decision making. Hence, unavoidable fixed…

Q: Part U67 is used in one of Broce Corporation's products. The company's Accounting Department reports…

A: In the given question the Relevant cost to Make should be compared with Relevant cost to Buy.  If…

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A: Increase(decrease) in profit on purchasing from outside supplier = (Relevant cost per unit -…

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A: Total savings = Total cost of manufacture - Total cost of purchase

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A: Answer a) Statement of Comparative Cost assuming that there is no alternative use for the facilities…

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A: solution : existing cost for 10000 units of QE767 Direct materials $80,000 Direct labor…

Q: Dixon Company manufactures part 347 for use in one of its main products. Normal annual production…

A: Fixed costs per 100 units = $160 Total units = 100,000 units Total fixed costs = $160 x 100,000 /…

Q: Bordome Company produces component A1 for use in one of its electronic gadgets. Normal annual…

A:

Q: The Park Avenue Corporation currently makes a part required in its finished product. The company…

A: When there are alternatives of manufacturing the product inhouse or purchase from outside vendor ,…

Q: What is the financial advantage (disadvantage) of accepting the outside supplier’s offer?

A: Its Necessary for every manufacturer to analyse whether they need to product internally or buy from…

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A: Given, Cost per unit to produce 5000 units: Direct materials $3 Direct labor (variable cost) 5…

Q: Carver Company manufactures a component used in the production of one of its main products. The…

A: Fixed overheads are the overheads which are incurred for an accounting period that, within certain…

Q: A company is considering buying a part that they currently make for one of their products. The costs…

A: Introduction: The tangible elements that go into creating a product are referred to as direct…

Q: ​Foundations, Inc. produces and sells cosmetic products.​ Currently, the company is operating at​…

A:

Q: Han Products manufactures 33,000 units of part S-6 each year for use on its production line. At this…

A: Decision Making -  It the process of choosing best alternative option amongst the available options.

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A: A make-or-buy decision seems to be a process of employing cost-benefit analysis to make a calculated…

Q: Comet, Inc. has been experiencing the following costs when it produces 12,000 units of a…

A: The question is related to make or buy the product from outside. If we have to choose amomgst the…

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A: This question deals with the question of decision making and relevant costing. In decision making,…

Q: Sage Company is operating at 90% of capacity and is currently purchasing a part used in its…

A: Differential cost refers to the increase or decrease in the anticipated cost which is the result of…

Q: NUBD Co. manufactures Part 123 for use in its production cycle. The cost per unit for 20,000 units…

A: Relevant cost per unit = Direct material + direct labor + variable overhead+ avoidable fixed…

Q: what would be the amount of differential cost increase or decrease from making the part rather than…

A: Differential analysis:   Differential analysis (also called incremental analysis) is a management…

Q: Royal Company manufactures 20,000 units of part R-3 each year for use on its production line. At…

A:

Q: Edidas Company needs 20,000 units of Part GX to use in producing one of its products. If Edidas buys…

A: Variable cost means the cost which vary with the level of output where as fixed cost remain fixed…

Q: Riggs Company purchases sails and produces sailboats. It currently produces 1,200 sailboats per…

A: In make or buy decision making, the management determines the cost that can affect the result of a…

Q: Grey Inc. has been purchasing a component, Z for $85 a unit. The company is currently operating at…

A: Grey inc. is in the situation of make/buy decision. That plan under which per unit cost is less is…

Q: Supler Corporation produces a part used in the manufacture of one of its products. The unit product…

A: Financial Advantage: The financial advantage is the saving per unit from the buy decision instead of…

Q: Riggs Company purchases sails and produces sailboats. It currently produces 1,200 sailboats per…

A: B) If Riggs rented the excess capacity for $77,000 per year . Profit from using of excess capacity…

Q: Supler Corporation produces a part used in the manufacture of one of its products. The unit product…

A: Make or buy decision: It is the act of choosing to manufacture a component or purchase from the…

Q: Sage Company is operating at 90% of capacity and is currently purchasing a part used in its…

A: Formulas: Differential cost = Units*(Manufacturing cost - Variable cost of making)

Q: Shine Engine Company manufacturers Part A which is used in several of its engine models. Monthly…

A: Avoidable cost: If a particular activity is not carried out, then the cost which is not incurred is…

Q: mickey comapny uses 5000 units of pat Z each year as a component in the assembly of one of its…

A: Under make or buy decision,  If the cost savings are more than the cost to buy external source then…