Per 15,000 Units Unit per Year $14 $210,000 Direct materials.. Direct labor.... Variable manufacturing overhead Fixed manufacturing overhead, traceable. Fixed manufacturing overhead, allocated. .... 10 150,000 45,000 90,000 135,000 6* 9. Total cost... $42 $630,000 ... *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 1. Assuming that the company has no alternative use for the facilities that are now being used to produce the carburetors, should the outside supplier's offer be accepted? Show all computations. 2. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capac- ity to launch a new product. The segment margin of the new product would be S150,000 per year. Should Troy Engines, Ltd., accept the offer to buy the carburetors for $35 per unit? Sfiow all computations.

Per 15,000 Units Unit per Year $14 $210,000 Direct materials.. Direct labor.... Variable manufacturing overhead Fixed manufacturing overhead, traceable. Fixed manufacturing overhead, allocated. .... 10 150,000 45,000 90,000 135,000 6* 9. Total cost... $42 $630,000 ... *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 1. Assuming that the company has no alternative use for the facilities that are now being used to produce the carburetors, should the outside supplier's offer be accepted? Show all computations. 2. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capac- ity to launch a new product. The segment margin of the new product would be S150,000 per year. Should Troy Engines, Ltd., accept the offer to buy the carburetors for $35 per unit? Sfiow all computations.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 8MC: What is the conversion cost to manufacture insulated travel cups if the costs are: direct materials,...

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