Terry Inc. manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 2,000 units of product OP89 for $120,000. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs: Cost per unit ($) Direct Materials 28 Direct Labor 18 Variable Overhead 16 Allocated Fixed Overhead 4 Required 1. What is the relevant cost to make the product internally? 2. What is the estimated increase or decrease in short-term operating profit of producing the product internally versus purchasing the product from a supplier? 3. Which alternative is more attractive to Terry Inc, make or buy the machine parts?

Q: Hattie Company has been purchasing 40,000 units of component, Part A25 for $38.40 per unit. Hattie…

A: Under differential analysis, the relevant cost of buying the component should be compared with…

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: The SP Corporation makes 32,000 motors to be used in the production of ts sewing machines. The…

A: The question is based on the concept of Cost Accounting.

Q: Terry Inc. manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Tris Technology Company produces a fibre cloth that could easily wipe away any dirt and water. The…

A: Special orders have separate terms and conditions then regular orders and a company has to…

Q: Part P40 is a part used in the production of air conditioners at Jackson Corporation. The following…

A: Net operating income = Desired operating income - fixed costs = 98000-41000*50% = $77,500

Q: Cardinal Company needs 20,000 units of a certain part to use in its production cycle. The following…

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

Q: Waterway Company manufactures widgets. Carla Vista Company has approached Waterway with a proposal…

A: We should not consider unavoidable manufacturing overhead. Because they are fixed cost and not…

Q: Terry Inc. manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an…

A: Direct materials: It is the basic input required to manufacture the finished products. The raw…

Q: Orion Inc. needs 10,000 parts to use in its production cycle. Venus has offered to sell the parts to…

A: In make or buy decision making, we consider that option which is cost saving.

Q: The SP Corporation makes 40,000 motors to be used in the production of its sewing machines. The…

A: Financial advantage (disadvantage) as a result of making the motors rather than buying = (Purchase…

Q: Futura Company purchases the 61,000 starters that it installs in its standard line of farm tractors…

A: If the cost of buying is more than the cost of making, then there will be financial advantage. If…

Q: Kuat Drive Inc. manufactures machine parts for Star Destroyer engines. CEO Adhi Mundy is considering…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

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: Makina Company manufactures engines on a cost-plus basis. The cost of a particular machine follows:…

A: This question deals with the concept of relevant costing. Relevant costing means considering the…

Q: Rubium Micro Devices currently manufactures a subassembly for its main product. The costs per unit…

A: Relevant cost = (Direct material + direct labor + variable overhead) x no. of units + Avoidable…

Q: Which alternative is more attractive to Terry Inc, make or buy the machine parts? 4. What strategic…

A: Part 3. In order to find the better option of make or buy, Terry Inc. will have to see if the option…

Q: Juanita Company must decide whether to make or buy some of its components for the appliances it…

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

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: he Haven Machine Company makes 40,000 screws to be used in the production of its washing machines.…

A: In this question, we have to compute that the company should buy or make the product.

Q: Company X was recently approached by a supplier that would like to sell Company X a part. Company X…

A: Business entities either produce the goods themselves or purchase the goods from outside suppliers.…

Q: Omega Corporation currently manufactures a component for its main product. The costs per unit are as…

A:

Q: oposal. What are the relevant costs for​ Rubium?

A: Direct Materials refers to the raw materials used to manufacture a product. Normally all the direct…

Q: Pamela Company makes steel blades for lawn mowers that it heat treats, assembles and sells. The cost…

A: The decisions of buying and purchasing should be made after considering the relevant cost of the…

Q: What is the relevant cost per unit to make the product internally? 2. What is the estimated…

A: Relevant cost are those costs which are avoidable if the products  are not manufactured . Those cost…

Q: Your Company uses a total of 15,000 units of a part that are produced and used every year. The…

A: Make cost is the cost of producing the product internally. Buy cost is the cost to purchase the…

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

A: Relevant Costs are the equal to the marginal cost of production, i.e. the additional expenditure…

Q: Prepare a report that shows the financial impact of buying part Q89 from the supplier rather than…

A: Computation of cost of make and  cost of buy to determine the financial impact of buying part Q 89…

Q: Selma Corporation uses Part PB7 in one of its products. The company's Accounting Department reports…

A: Relevant costing is a costing technique that eliminates the usage of historical or unavoidable costs…

Q: the amount of the relevant costs that would be saved by using the released facilities in the…

A: Given in the question: Production (in Units) 20000 Cost per unit is as below:   Direct…

Q: JTA Corp must decide whether to make or buy some of its components for the appliances it produces.…

A: Relevant costs are those costs which are affected due to the decision making i;e they change with…

Q: Recher Corporation uses part Q89 in one of its products. The company's Accounting Department reports…

A: The Make or buy choice is the demonstration of settling on a vital decision between delivering a…

Q: which option is advantageous and by how much

A: Purchase price per unit P320 Fixed manufacturing overhead per unit P130 Total cost of buying the…

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

A: Material cost=8 Cost form outside=16 Savings due to purchase from outside=7(Direct…

Q: oston Exemcutive, Inc., produces executive limousines and currently manufactures the mini-bar inset…

A: In this question, we have been asked to take the decision of make and buy. If the purchase cost is…

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…

Q: Ring Company makes telephones. Currently, Ring makes all components of the telephones in-house. An…

A: Total cost of a product includes both variable and fixed cost. Variable cost further includes direct…

Q: Terry Inc. manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Shosalosa Company produces a part that is used in the manufacture of one of its products.  The costs…

A: In terms of accountancy, make or buy analysis helps a business firm in deciding whether the business…

Q: Zeus Company, a manufacturer of snowmobiles, is operating at 70% of plant capacity. Its plant…

A: Manufacturing cost consist of direct materials, direct labor and manufacturing variable overheads.

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: relevant cost(

A: [Note: Since you have posted a multi-part question, we will solve the first three parts for you. For…

Q: CM Manufacturing has provided the following unit costs pertaining to a component they manufacture…

A: The fixed manufacturing overhead is unavoidable. Therefore, it should not consider for the Make or…

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

A: Hi student Since there are multiple subparts, we will answer only first three subparts. If you want…

Q: Mo Furniture manufactures a frame for use in its production of sofas. When 10,000 frames are…

A: A cost is said to be a relevant cost when its presence or increase or decrease affects the decision…

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: 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: Each year, Basu Company produces 14,000 units of a component used in microwave ovens. An outside…

A: The make-or-buy choice seems to be the act of deciding whether to manufacture a product in-house or…