MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Chapter 10, Problem 4QS
To determine
Concept introduction:
Decision making plays an important role in the management. The decisions taken by managers are called managerial decisions. Managerial Decisions are decisions taken by managers for the operations of a firm. These decisions include setting target growth rates, hiring or firing employees, and deciding what products to sell. Manager’s decisions are taken on the basis of quantitative as well as the qualitative measures. The managerial decision includes the decisions like make or buy, accept or reject new offers, sell or further process etc. These decisions are taken on the basis of relevant costs.
Relevant costs are the costs that are relevant for any decision making. Relevant costs are helpful for take managerial decisions like make or buy, accept or reject new offers, sell or further process etc.
Two basic types of the relevant costs are as follows:
- Out-of-pocket costs
- Opportunity costs
To indicate:
The decision to sell or repair and then sell.
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Garcia Company has 10,000 units of its product that were produced last year at a total cost of $150,000. The units were damaged in a rainstorm because the warehouse where they were stored developed a leak in the roof. Garcia can sell the units as is for $2 each or it can repair the units at a total cost of $18,000 and then sell them for $5 each. Should Garcia sell the units as is or repair them and then sell them?
Garcia Company has 10,500 units of its product that were produced at a cost of $157,500. The units were damaged in a rainstorm.
Garcia can sell the units as scrap for $21,000, or it can rework the units at a cost of $39,500 and then sell them for $52,000.
(a) Prepare a scrap or rework analysis of income effects.
(b) Should Garcia sell the units as scrap or rework them and then sell them?
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Garcia Company has 10,400 units of its product that were produced at a cost of $156,000. The units were damaged in a rainstorm.
Garcia can sell the units as scrap for $31,200, or it can rework the units at a cost of $49,600 and then sell them for $65,300.
(a) Prepare a scrap or rework analysis of income effects.
(b) Should Garcia sell the units as scrap or rework them and then sell them?
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Chapter 10 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
Ch. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 1DQCh. 10 - Is nonfinancial information ever useful in...Ch. 10 - What is a relevant cost? Identify the two types of...Ch. 10 - Prob. 4DQCh. 10 - Prob. 5DQ
Ch. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQCh. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - Prob. 3QSCh. 10 - Prob. 4QSCh. 10 - Prob. 5QSCh. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Signal mistakenly produced 1,000 defective cell...Ch. 10 - Prob. 10QSCh. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Rory Company has a machine with a book value of...Ch. 10 - Fill in each of the blanks below with the correct...Ch. 10 - Prob. 2ECh. 10 - Goshford Company produces a single product and has...Ch. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Prob. 7ECh. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Suresh Co. expects its five departments to yield...Ch. 10 - Exercise 23-11 Sales mix A1 Childress Company...Ch. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 1PSACh. 10 - Calla Company produces skateboards that sell for...Ch. 10 - Prob. 3PSACh. 10 - Prob. 4PSACh. 10 - Prob. 5PSACh. 10 - Elegant Decor Companys management is trying to...Ch. 10 - Prob. 1PSBCh. 10 - Prob. 2PSBCh. 10 - Prob. 3PSBCh. 10 - Prob. 4PSBCh. 10 - Prob. 5PSBCh. 10 - Esme Companys management is trying to decide...Ch. 10 - Prob. 10SPCh. 10 - Apple currently chooses to buy (mainly from...Ch. 10 - Prob. 3BTNCh. 10 - Assume that you work for Greebles Department...Ch. 10 - Prob. 5BTNCh. 10 - Prob. 6BTNCh. 10 - Prob. 7BTNCh. 10 - Prob. 8BTNCh. 10 - Prob. 9BTN
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