Bonneville Company is producing a subassembly used in the production of a product. The costs incurred...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Bonneville Company is producing a subassembly used in the production of a product. The costs incurred for the subassembly follow: Per Unit Direct materials $ 6.00 Direct labor 4.00 Variable factory overhead 1.00 Fixed supervisor salary 3.00 Depreciation expense on factory equipment 2.00 General fixed factory overhead allocated 5.00 Total costs $21.00 The above per unit costs are based on 8,000 units. An outside supplier will provide 8,000 subassemblies for $19 per unit. The supervisor will be terminated if the subassemblies are not produced in house. The idle factory will be used to manufacture another product with a contribution margin of $60,000. Requirements: 1. What should Bonneville do? Explain your decision in detail Show all calculations. 2. What other factors should Bonneville consider? (DCLor A! T+EN+F10 (Mac) Bonneville Company is producing a subassembly used in the production of a product. The costs incurred for the subassembly follow: Per Unit Direct materials $ 6.00 Direct labor 4.00 Variable factory overhead 1.00 Fixed supervisor salary 3.00 Depreciation expense on factory equipment 2.00 General fixed factory overhead allocated 5.00 Total costs $21.00 The above per unit costs are based on 8,000 units. An outside supplier will provide 8,000 subassemblies for $19 per unit. The supervisor will be terminated if the subassemblies are not produced in house. The idle factory will be used to manufacture another product with a contribution margin of $60,000. Requirements: 1. What should Bonneville do? Explain your decision in detail Show all calculations. 2. What other factors should Bonneville consider? (DCLor A! T+EN+F10 (Mac)
Expert Answer:
Answer rating: 100% (QA)
1 The company must accept the outside suppliers offer if the total relevant cost to buy the subassem... View the full answer
Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
Posted Date:
Students also viewed these accounting questions
-
Lacy, Inc., produces a subassembly used in the production of hydraulic cylinders. The subassemblies are produced in three departments: Plate Cutting, Rod Cutting, and Welding. Materials are added at...
-
Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units...
-
Fernandes Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in...
-
Prove that e is an irrational number using the following argument by contradiction. Suppose that e = M/N, where M, N are nonzero integers. (a) Show that M!e- is a whole number. (b) Use the power...
-
Below are amounts found in the income statements of three companies? Required: 1. For each company, calculate (a) Gross profit, (b) Operating income, (c) Income before income taxes, (d) Net income....
-
Scoresby Inc. uses a perpetual inventory system. At December 31, 2015, the companys accounting records provided the following information for Product B: Required: 1. Prepare a statement of earnings...
-
An important omission from flowcharts and matrix techniques is ( ___________________ ). (a) the ability to represent decisions (b) the ability to include internal control considerations (c) the...
-
Carol Moerdyk, owner of Carols Fashion Designs, Inc., is planning to request a line of credit from her bank. She has estimated the following sales forecasts for the firm for parts of 2016 and 2017:...
-
QUESTION 2 (20 Marks) REQUIRED Use the information givenbelow to prepare the Income statement of Kendall Manufacturers for October 2023 using the following methods: 2.1 Marginal costing (10 marks)...
-
Kofi Allon, who is 32 years old and single, is employed as a technical consultant for a large electronics distributor. He lives at 678 Birch Street, LaMesa, CA 91941. Kofi's Social Security number is...
-
aitralaono Chapter Exercises 13.98 Given the information in this table, calculate r: Product of Squared X Squared Y Deviation Y Deviation Deviation Deviation Deviation Scores Scores Scores Y Scores...
-
How do you think the control function should be organized and managed at Anglo American? Although some observers might assume that Anglo American PLC is a U.S. company, in reality the company has...
-
Identify the basic control issues at Anglo American. Although some observers might assume that Anglo American PLC is a U.S. company, in reality the company has never been American. Instead, Anglo...
-
What criteria most logically determine whether a new organization design can be judged to be successful? Although some observers might assume that Anglo American PLC is a U.S. company, in reality the...
-
What basic elements of organization design were changed? What elements were probably not changed? Although some observers might assume that Anglo American PLC is a U.S. company, in reality the...
-
Discuss the basic perceptual process and note how it differs across cultures.
-
Python: I need help so bad!!!! Thank you Prime Number Checker: You will write a program that finds and prints all the factors of a given number and checks whether it is a prime number. Specifically,...
-
A Firm intends to invest some capital for a period of 15 years; the Firm's Management considers three Options, each consisting of purchasing a machinery of a specific brand, different for each...
-
Multiple Choice Questions 1. Which of the following types of analysis compares one corporation to another corporation and to industry averages? a. Cross sectional analysis b. Time series analysis c....
-
When are prior period adjustments used?
-
Janbo Company produces a variety of stationery products. One product, sealing wax sticks, passes through two processes: blending and molding. The weighted average method is used to account for the...
-
State which of the following statements is true and which false? If false, explain why. (a) Profit is income earned less expenses paid. (b) Revenue less cost of sales less expenses will give net...
-
Dale Reynolds has the following details from his accounts for the year ended 31 December 2012. Required: Draw up Dale Reynolds trading account for the year ended 31 December 2012. Opening inventory...
-
Joan Smith has the following details from her accounts year ended 31 December 2012. Required: Draw up Joan Smiths income statement (trading and profit and loss account) for the year ended 31 December...
Study smarter with the SolutionInn App