Question
All of the following are relevant in a sell or process-further decision except a. joint costs. b. sales value after further processing. c. additional processing
All of the following are relevant in a sell or process-further decision except
a. | joint costs. | |
b. | sales value after further processing. | |
c. | additional processing costs. | |
d. | sales value at the split-off point. |
Contribution margin information is not relevant for
a. | pricing decisions for special orders. | |
b. | the elimination of unprofitable segment decisions. | |
c. | sales mix with resource constraint decisions. | |
d. | determining the amount that sales exceeded fixed costs. |
Relevant costs in a sell or process-further decision include
a. | costs of additional processing. | |
b. | joint product costs. | |
c. | both additional revenues and additional costs. | |
d. | revenues after additional processing. |
Anderson Co. makes and uses 5,000 components each year in its manufacturing operations. An outside supplier has offered to supply the components to Anderson at $66 per unit. Anderson's production costs are as follows:
Direct materials | $ 8 |
Direct labor | 32 |
Variable overhead | 12 |
Fixed overhead (based on normal capacity) | 34 |
If Anderson accepts the order, $8 of fixed overhead per unit will be eliminated. What is the relevant cost to produce one unit?
a. | $52 | |
b. | $60 | |
c. | $86 | |
d. | $78 |
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