Question
10. Coronado Industries incurs the following costs to produce 9100 units of a subcomponent: Direct materials $7644 Direct labor 10283 Variable overhead 11466 Fixed overhead
10. Coronado Industries incurs the following costs to produce 9100 units of a subcomponent:
Direct materials | $7644 |
Direct labor | 10283 |
Variable overhead | 11466 |
Fixed overhead | 16200 |
An outside supplier has offered to sell Coronado the subcomponent for $2.85 a unit. If Coronado could avoid $3000 of fixed overhead by accepting the offer, net income would increase (decrease) by
$458.
$6458.
$(5639).
$(1724).
11. Bramble Corp. incurs the following costs to produce 11900 units of a subcomponent:
Direct materials | $9996 |
Direct labor | 13447 |
Variable overhead | 14994 |
Fixed overhead | 16200 |
An outside supplier has offered to sell Bramble the subcomponent for $2.85 a unit. If Bramble accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be
$922.
$(3600).
$8122.
$(922).
13. Sheridan Company, Inc.currently manufactures a wicket as its main product. The costs per unit are as follows:
Direct materials and direct labor | $13 |
Variable overhead | 5 |
Fixed overhead | 8 |
Total | $26 |
The fixed overhead is an allocated common cost. How much is the relevant cost of the wicket?
$18
$21
$39
$26
Please answer all 3 questions. Thank you!
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