18. Quarantine Company manufactures Part AA for use in its production cycle. The costs per unit...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
18. Quarantine Company manufactures Part AA for use in its production cycle. The costs per unit for 25,000 units for the part are as follows: Direct materials P 7.50 Direct labor Variable overhead Fixed overhead 37.50 15.00 20.00 Lockdown Company has offered to sell Quarantine the 25,000 units needed by the latter for P75 per unit. If Quarantine accepts the offer, the released facilities could be used to save relevant costs amounting to P112,500 in the manufacture of another part. In addition, P12.50 per unit of fixed overhead applied to part AA would totally eliminated. What alternative is more desirable and by what amount it is more desirable? 19. Beat Company manufactures 8,000 units of a certain component per year. This component is used in the production of the main product. The following are the costs to make the component per unit: Direct materials P 4 Direct labor 4 Variable overhead 3 5 Fixed overhead If Beat Company buys the component from an outside supplier, the company can rent out the released facilities for P12,360 a year. The cost of the component per unit as quoted by the supplier is P15. 25% of fixed overhead applied in the manufacture of the component will continue regardless of what decision is made. For all purchase made by the company, freight and handling costs are applied at 2% of the purchase price. The direct materials cost presented above is exclusive of such freight and handling cost. What is the advantage or disadvantage of buying the component? 20. 20 Hooray Company has been manufacturing 12,000 units of Part A which is used to manufacture one of its products. At this level of production, the cost per unit is as follows: Direct materials P 4.80 Direct labor Variable overhead Fixed overhead 19.20 9.60 14.40 Hooray Company has an opportunity to purchase the parts from Supplier Silver Company at P45.60 per unit. It determined that it could use the facilities presently used to manufacture Part A and generate an operating profit of P9,600. It also determined that 40% of the fixed overhead applied will continue even if Part A is purchased from Supplier Silver If the Company decides to purchase from an outside supplier, what will be the gain or loss? 18. Quarantine Company manufactures Part AA for use in its production cycle. The costs per unit for 25,000 units for the part are as follows: Direct materials P 7.50 Direct labor Variable overhead Fixed overhead 37.50 15.00 20.00 Lockdown Company has offered to sell Quarantine the 25,000 units needed by the latter for P75 per unit. If Quarantine accepts the offer, the released facilities could be used to save relevant costs amounting to P112,500 in the manufacture of another part. In addition, P12.50 per unit of fixed overhead applied to part AA would totally eliminated. What alternative is more desirable and by what amount it is more desirable? 19. Beat Company manufactures 8,000 units of a certain component per year. This component is used in the production of the main product. The following are the costs to make the component per unit: Direct materials P 4 Direct labor 4 Variable overhead 3 5 Fixed overhead If Beat Company buys the component from an outside supplier, the company can rent out the released facilities for P12,360 a year. The cost of the component per unit as quoted by the supplier is P15. 25% of fixed overhead applied in the manufacture of the component will continue regardless of what decision is made. For all purchase made by the company, freight and handling costs are applied at 2% of the purchase price. The direct materials cost presented above is exclusive of such freight and handling cost. What is the advantage or disadvantage of buying the component? 20. 20 Hooray Company has been manufacturing 12,000 units of Part A which is used to manufacture one of its products. At this level of production, the cost per unit is as follows: Direct materials P 4.80 Direct labor Variable overhead Fixed overhead 19.20 9.60 14.40 Hooray Company has an opportunity to purchase the parts from Supplier Silver Company at P45.60 per unit. It determined that it could use the facilities presently used to manufacture Part A and generate an operating profit of P9,600. It also determined that 40% of the fixed overhead applied will continue even if Part A is purchased from Supplier Silver If the Company decides to purchase from an outside supplier, what will be the gain or loss?
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
The Maybe Pay Life Insurance Company is trying to sell you an investment policy that will pay you and your heirs $44,000 per year forever. Assume the required return on this investment is 6.9...
-
1.write down your smarter goal? 2. is your goal exciting and or inspiring? explain why below. if how can you make your goal more exciting.3. For a goal to be meaningful, its attainment should lie in...
-
The following is the sales budget for Lemonis, Incorporated, for the first quarter of 2022: January February March Sales budget $ 132,000 $ 149,000 $ 164,000 Credit sales are collected as follows: 55...
-
Consider a set of documents. Assume that all documents have been normalized to have unit length of 1. What is the "shape" of a cluster that consists of all documents whose cosine similarity to a...
-
Give an example of when conflict would be beneficial to a project and an example of when conflict would be harmful to a project.
-
Use a graph to show the change in the aggregate demand curve resulting from an increase in government purchases if the government purchases multiplier equals 2. On the same graph, show the change in...
-
A bank is considering extending loans to a population of four borrowers with identities A, B, C, and D. Borrowers A and B are of type 1, while C and D are of type 2. The bank cannot observe borrowers...
-
Do you agree with the accounting treatment that Overstock typically applied to the revenues generated by its "Partner" line of business? Why or why not?
-
[0/1 Points] DETAILS PREVIOUS ANSWERS SCALCET9 5.4.015. Find the general indefinite integral. (Use C for the constant of integration. Remember to use absolute values where appropriate.) 4+x+x dx X 4...
-
A building's common area maintenance (CAM) is estimated to be $80,000 when it is fully occupied. Suppose that 60% of the CAM is fixed. If the actual occupancy of the building is 80%. What will be the...
-
Social media and traditional media are both critical to the Marketing Manager. Explain some of the differences between traditional media and social media outlining how effectively businesses can...
-
What is the NOI, Net Cash Flow, Return on Equity and Loan Constant for a multifamily apartment building, given the following information? Number of Units:200 1 Br.60 2 Br.100 3br.40 Average Base...
-
Consider the following three stocks and use the Index Model. Assume the expected excess return on the S&P500 is 0.07 and its variance is 0.023. Form the optimal risky portfolio. How much of the...
-
Makina Company manufactures engines on a cost-plus basis. The cost of a particular machine follows: Direct materials, P400,000; Direct Labor, P300,000; Supervisor's salary, P40,000; Fringe benefits...
-
Describe the differences between a traditional project manager and a product owner, this should include the characteristics and work they do.
-
Whispering Winds Limited owns a 23% interest in the shares of Bramble Corporation. During the year, Bramble pays $11200 in dividends to Whispering Winds and reports $106000 net income. Whispering...
-
(a) With not more than 300 words, examine why Malaysia missed its 2020 targets to divert 40% of waste from landfills and increase recycling rates to 22%. (10 marks) b) Why arent Malaysian recycling?...
-
____________ is the ability to control anothers behavior because of the possession of knowledge, experience, or judgment that the other person does not have but needs. (a) Coercive power (b) Expert...
-
The pattern of authority, influence, and acceptable managerial behavior established at the top of the organization is called ______________. (a) organizational governance (b) agency linkage (c) power...
-
The process by which managers help others to acquire and use the power needed to make decisions affecting themselves and their work is called ______________. (a) politics (b) managerial philosophy...
Study smarter with the SolutionInn App