1. Explanation Particulars Cost Total Cost Cost to purchase M TR-2000 from Marley: Bid price from Marley $ 20.00 $ 600,000 Equipment lease penalty [ ( $ 45 , 000 ÷ 12 ) × 2 × 1 ] $ 0.25 7,500 Total cost to purchase (a) $ 20.25 $ 607,500 Cost for Midwest to Make M TR-2000: Direct material ( $ 168 , 750 ÷ 25 , 000 ) × 1.07 $ 7.22 $ 216,675 Direct labor ( $ 100 , 000 ÷ 25 , 000 ) × 1.04 $ 4.16 124,800 Factory space rental ( $ 150 , 000 ÷ 30 , 000 units ) $ 5 2. To determine Identify and briefly discuss the strategic factors that Division M should consider in the given decision. 3. To determine Refer to the specific ethical standards for management accountants outlined in Chapter 1,and assess the ethical issues in John Porter’s request of L H.

8th Edition

ISBN: 9781259917028

Author: BLOCHER, Edward

Publisher: Mcgraw-hill Education,

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Question

Chapter 11, Problem 37P

To determine

Prepare a relevant cost analysis that shows whether the Company M Division should make MTR-2000 orpurchase it from Company M for 2019. (a) Compute the relevant cost per unit to makeand the relevant cost per unit to buy externally. (b) Compute the total difference in relevant costs between the two alternatives; assume that the volume of units is 30,000.

To determine

Identify and briefly discuss the strategic factors that Division M should consider in the given decision.

To determine

Refer to the specific ethical standards for management accountants outlined in Chapter 1,and assess the ethical issues in John Porter’s request of L H.

Expert Solution & Answer

Chapter 11 Solutions

Cost Management

Ch. 11 - Prob. 1Q Ch. 11 - List at least four different decisions for which...Ch. 11 - What is the relevant cost when determining whether...Ch. 11 - List four to six strategic factors that are often...Ch. 11 - How do short-term evaluations affect a manager’s...Ch. 11 - List four or five important limitations of...Ch. 11 - How do strategic factors affect the proper use of...Ch. 11 - List some of the behavioral, implementation, and...Ch. 11 - How does the presence of one production constraint...Ch. 11 - What is the relationship, if any, between the...

Ch. 11 - Williams Auto has a machine that installs tires....Ch. 11 - Jackson Inc. disposes of other companies’ toxic...Ch. 11 - Durant Co. manufactures glass bottles for dairy...Ch. 11 - Sweet Dream Hotel has labor costs that are mostly...Ch. 11 - Lance’s Diner has a hot-lunch special each weekday...Ch. 11 - Prob. 16BE Ch. 11 - Prob. 17BE Ch. 11 - Prob. 18BE Ch. 11 - The external purchase price is $35 for a part that...Ch. 11 - Prob. 20BE Ch. 11 - Prob. 21E Ch. 11 - Prob. 22E Ch. 11 - Prob. 23E Ch. 11 - Prob. 24E Ch. 11 - Prob. 25E Ch. 11 - Prob. 26E Ch. 11 - Prob. 27E Ch. 11 - Cantel Company produces cleaning compounds for...Ch. 11 - Prob. 29E Ch. 11 - Make or Buy Terry Inc. manufactures machine parts...Ch. 11 - Prob. 30B.E Ch. 11 - Asset Replacement An uninsured boat costing...Ch. 11 - Profit from Processing Further Deaton Corporation...Ch. 11 - Make vs. Buy (Sourcing Decision) Eggers Company...Ch. 11 - Prob. 30FE Ch. 11 - Special-Order Pricing Barry’s Bar-B-Que is a...Ch. 11 - Prob. 32P Ch. 11 - Prob. 33P Ch. 11 - Prob. 34P Ch. 11 - Prob. 35P Ch. 11 - Prob. 36P Ch. 11 - Prob. 37P Ch. 11 - Prob. 38P Ch. 11 - Prob. 39P Ch. 11 - Prob. 40P Ch. 11 - Prob. 41P Ch. 11 - GianAuto Corporation manufactures parts and...Ch. 11 - Prob. 45P Ch. 11 - Prob. 46P Ch. 11 - Prob. 47P Ch. 11 - Home Service Company offers monthly service plans...

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