Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Blossom Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Blossom Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 51,000 timers, the company has calculated the following unit costs. Direct xed costs include supervisory and clerical salaries and equipment depreciation. Direct materials $ 12 Direct labor 6 Variable manufacturing overhead 3 Direct xed manufacturing overhead 10 (30% salaries, 70% depreciation) Allocated xed manufacturing overhead 7 Total unit cost $ 38 Clifton Clocks has offered to provide the timer units to Blossom at a price of $ 36 per unit. If Blossom accepts the offer, the current timer unit supervisory and clerical staff will be laid off. (a1) Calculate the total relevant cost to make or buy the timer units. (Round answers to 0 decimal places, e.g. 5,250.) Make Buy $ $ Total relevant cost eTextbook and Media Save for Later Attempts: 0 of 3 USEd Submit Answer (a2) Assuming that Blossom Water has no other use for either the facilities or the equipment currently used to manufacture the timer units, should the company accept Clifton's offer? No Yes eTextbook and Media Save for Later Attempts: 0 of 3 USECl Submit Answer (b1) Assume that if Blossom Water accepts Clifton's offer, the company can use the freed-up manufacturing facilities to manufacture a new line of growing lights. The company estimates it can sell 92,680 of the new lights each year at a price of $ 12. Variable costs of the lights are expected to be $5 9 per unit. The timer unit supervisory and clerical staff would be transferred to this new product line. Calculate the total relevant cost to make the timer units and the net cost if they accept Clifton's offer. Total relevant cost to make $ Net relevant cost if they accept Clifton's offer $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (b2) Should Blossom Water accept Clifton's offer? Clifton's offer. Accept Do not accept eTex'tb'ook' and Media Save for Later Attempts: O of 3 USEd Submit

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

Integrated Accounting For Windows

Authors: Dale Klooster

7th Edition

0538747978, 9780538747974

More Books

Students also viewed these Accounting questions

Question

1. I try to create an image of the message

Answered: 1 week ago

Question

4. What is the goal of the others in the network?

Answered: 1 week ago