Mighty Safe Fire Alarm is currently buying 57,000 motherboards from MotherBoard, Inc. at a price of $65 per board. Mighty Safe is considering making its own motherboards. The costs to make the motherboards are as follows: direct materials, $28 per unit; direct labor, $10 per unit; and variable factory overhead, $16 per unit. Fixed costs for the plant would increase by $80,000. Which option should be selected and why?

Q: Assume that HASF  furniture Inc., as described, currently purchases the chair cushions for its lawn…

A: The companies make their make or buy decisions based on comparative analysis of total costs incurred…

Q: C Direct materials 1 2 Direct labor 3 Variable MOH Fixed MOH 560,000 105,000 70,000 455,000…

A:

Q: Shelby Industries has a capacity to produce 45,000 oak shelves per year and is currently selling…

A: Shelby Industries has capacity to produce 45,000 oak shelves per year.   But they are Currently…

Q: Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of…

A: Solution:- 1)Computation of the difference in cost between making and buying the umbrella tote bag…

Q: Mimi's Fixtures manufactures kitchen tiles in one plant, which has a practical capacity of 30,000…

A: Cost: Cost is the summation of all expenditures which is related to the conversion of raw material…

Q: Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase…

A: In decision making, lower costs are preferred as in this case, making is cost-efficient. Fixed costs…

Q: company can buy the part from an outside supplier for​ $2 per unit and avoid​ 20% of the fixed…

A:

Q: Shocking Electronics uses a standard part to make different types of radios. The total cost to make…

A: Working note: Fixed cost incurred if parts outsource Total fixed cost = $40000 $40000*80%=  $32000

Q: Gilberto Company currently manufactures 78,000 units per year of one of its crucial parts. Variable…

A: Given: Manufacture units = 78000 per year Variable cost = $2.60 per unit Fixed cost (making this…

Q: Desert Industries manufactures 5,000 units of Part X300 each month for use in production. The…

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

Q: Gelb Company currently manufactures 40,000 units per year of a key component for its manufacturing…

A: The decision to manufacture or buy needs to be taken on the basis of impact of cost changes arising…

Q: Durham Corporation has a Motor Division that produces motors of various types. The company's Machine…

A: Motor division's minimum acceptable price would be = Variable cost expected to be incurred on the…

Q: Lingkod Company, a manufacturer of furniture sets, is considering to purchase the seat cushions…

A: Make-or-buy decisions should be based on the relevant cost of each option. Any costs that are…

Q: The management of International Aluminum Co. is considering whether to process aluminum ingot…

A: First calculate the total costs and revenues: Formulation as shown below:

Q: Wilma Company must decide whether to make or buy some of its compo- nents. The costs of producing…

A: Income statement: A statement that reports the income and expenses of the company is known as income…

Q: The Wood Division of Bramble Corp. manufactures rubber moldings and sells them externally for $50.…

A: Transfer pricing: The amount charged when one division sells the goods or services to another…

Q: Birkenstock is considering adding a new Big Buckle sandal to its current product offerings.…

A: Prepare the income statement as follows: Result:

Q: repare an incremental analysis showing whether the company should make or buy the switches. (Enter…

A: calculation for additional cost incurred are as follows:

Q: Campbell Corporation, which makes and sells 79,400 radios annually, currently purchases the radio…

A: The differential analysis is made by the company to measure the difference in the cost and revenue…

Q: Mighty Safe Fire Alarm is currently buying 61,000 motherboards from MotherBoard, Inc. at a price of…

A: To choose option we have to compare both ways expenses by calculating the total expenses of product…

Q: The management of International Aluminium Co. is considering whether to process aluminum ingot…

A: Process Costing: It is the method in which the cost of a product is determined on the basis of the…

Q: Every year Riverbed Industries manufactures 7,300 units of part 231 for use in its production cycle.…

A: A make or buy decision is the act of choosing between whether to produce in-house or purchase from…

Q: Birkenstock is considering adding a new Big Buckle sandal to its current product offerings.…

A: PLEASE LIKE THE ANSWER YOUR RESPONSE MATTERS  Requirement 1: Birkenstock's expected 2021 profit :…

Q: Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling…

A: Absolute advantage refers to an individual, company, region, or country's ability to create more of…

Q: Sandusky Inc. has the following costs when producing 100,000 units: Variable costs $600,000 Fixed…

A: The cost can be classified into two categories i.e fixed cost and variable cost. The  FIxed cost…

Q: Harmony is currently producing 100 units of a necessary component part by incurring P60,000 in…

A: Saving realize in buying instead of making the component = Relevant production costs - Buying costs…

Q: Companion Computer Company has been purchasing carrying cases for its portable computers at a…

A: The differential analysis is performed to compare the two alternatives available to manufacture the…

Q: Orange is currently buying 50,000 motherboard from MotherBoard, Inc. at a price of P65 per board.…

A: Solution: Total cost to buy = units * purchase price = 50000*65 = 3250000 Total costs to make =…

Q: Voltaic Electronics uses a standard part in the manufacture of different types of radios. The total…

A: Fixed cost remain fixed whatever may be the level of output where as variable cost will vary with…

Q: Gilberto Company currently manufactures 65,000 units per year of one of its crucial parts. Variable…

A: Manufacturing cost Manufacturing cost can be defined as total of all the relevant costs incurred in…

Q: Mohave Corp. is considering outsourcing production of ht eumbrella tote bag included with some of…

A: Calculation of above requirement are as follows

Q: Mighty Safe Fire Alarm is currently buying 57,000 motherboards from MotherBoard, Inc., at a price of…

A: Formulas:

Q: Diamond Computer Company has been purchasing carrying cases for its portable computers at a purchase…

A: Decision making is a process or an act of deciding something using rational thinking, intuition and…

Q: Goldberg Company currently manufactures 52,000 units per year of a key component for its…

A: Introduction Incremental cost: Incremental cost is the additional cost incurred by the company if it…

Q: mpany currently manufactures 52,000 units per year of a key compa er unit, fixed costs related to…

A: Incremental cost refers to the total expenses involved in order to produce an extra unit of a…

Q: Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling…

A: Incremental Revenue = Special order no. of units x Special order sales price per unit = 1,200 x $26…

Q: A Production Company can produce a product for $80 per unit. The investment per unit in equipment is…

A: Following is the answer to the given question

Q: Fedori Corporation has a Parts Division that does work for other Divisions in the company as well as…

A: This question is related to transfer pricing. Transfer pricing method of accounting is generally…

Q: "In my opinion, we ought to stop making our own drums and accept that outside supplier's offer,"…

A: In make or buy decision we evaluate both costs , making in our own plant and buying from…

Q: Waterways has discovered that a small fitting it now manufactures at a unit cost of $1.00 could be…

A: Working Note: Purchasing Cost = No. of units needed x Purchasing Cost per unit = 465,000 units x…

Q: Assume that HASF  furniture Inc., as described, currently purchases the chair cushions for its lawn…

A: Assume that HASF  furniture Inc., as described, currently purchases the chair cushions for its lawn…

Q: Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase…

A: While making decision in respect of making or buying, the cost which will increase or decrease shall…

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A: Incremental income = Incremental Sales revenue – Incremental costs

Q: Muspest Supplies is currently evaluating the cost of manufacturing some of the components utilised…

A: Relevant cost is the cost which is relevant in decision making.  Total number of parts per month…

Q: Mitus Company needs 20,000 special buckles for a backpack that it designs and manufactures. If the…

A: When there are two alternatives of either making or purchasing the product from outside, then total…

Q: Mighty Safe Fire Alarm is currently buying 55,000 motherboards from MotherBoard, Inc., at a price of…

A:

Q: Gilberto Company currently manufactures 66,000 units per year of one of its crucial parts. Variable…

A: Incremental cost: Incremental cost is the analysis of the costs in different avenues, which could be…

Q: Waterways has discovered that a small fitting it now manufactures at a unit cost of $1.00 could be…

A: Opportunity cost refers to that cost which is saved in case one alternative is selected over the…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.