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Hello, can you please answer questions 10-12 for me? Thanks much! 10. Because of limited production capacity a small electronics company needs to prioritize the
Hello, can you please answer questions 10-12 for me? Thanks much!
10. Because of limited production capacity a small electronics company needs to prioritize the production of the two most profitable products. The controller has provided the following information: Which product should be eliminated to maximize profit? a. Product A b. Product B c. Product C d. It does not make any difference since they are contributing equally. 11. Given: A company expects to manufacture 10,000 small medical devices next year and sell them to customers for $75.00 per unit. The costs to produce these devices are estimated to include $200,000 in total variable costs and $180,000 in total fixed costs. An outside firm has offered to produce all 10,000 devices for a total of $233,000. Twenty-five percent of the fixed costs would be eliminated if the 2 outsourcing option is taken. The volume of devices produced and sold and the revenue per unit is expected to be the same regardless of the outsourcing decision. Required: Assuming the company outsources the production of the components, what is the financial impact (i.e., change in operating income) in dollars of accepting the outsourcing offer? In addition, in your answer make sure to indicate whether the financial impact would be an increase or decrease in the company's operating income. 12. The R Company is evaluating a special order because the company is currently operating well under capacity. Using the company's normal costing process, variable costs of the special order would be $360,000 and fixed costs would be $100,000. Of the fixed costs, $40,000 would be for unavoidable overhead costs, and the remainder for rent on a special machine needed to complete the order. Required: What is the minimum price the controller should accept for the special order Step by Step Solution
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