Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Beta Inc. is currently making one of its components. Its annual requirements are 20,000 units. The variable cost per unit is $10 and the fixed

image text in transcribedimage text in transcribed
image text in transcribedimage text in transcribed
Beta Inc. is currently making one of its components. Its annual requirements are 20,000 units. The variable cost per unit is $10 and the fixed cost per unit is $10. Included in this fixed cost is the $75,000 salary of the factory supervisor, which would continue to be paid even if the components were purchased. Creto Inc. has offered to supply Beta with 20,000 units for $16 per unit. What is the dollar advantage or disadvantage to making the components? Select one: O $5,000 advantage O none of these O $80,000 disadvantage O $5,000 disadvantageAlpha Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 60,000 units per year is as follows: Direct materials $10.00 Direct labour 3.00 Variable manufacturing overhead 2.00 Fixed manufacturing overhead 4.00 Variable selling and administrative expenses 2.00 Fixed selling and administrative expenses 3.00 The normal selling price is $ 30 per unit. The company's capacity is 75,000 units per year. An order has been received from a mail-order house for 10,000 units at $25 per unit. If Delta accepts the special order by how much will profits increase? Select one: O $10,000 O $80,000 O $250,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Decision Modeling Business Analytics With Spreadsheet

Authors: Nagraj Balakrishnan, Barry Render, Ralph Stair, Charles Munson

4th Edition

1501515101, 978-1501515101

More Books

Students also viewed these Accounting questions