Question
Karpentry Company is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $30 and Karpentry would
Karpentry Company is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $30 and Karpentry would sell it for $66. The cost to assemble the product is estimated at $21 per unit and the company believes the market would support a price of $85 on the assembled unit. What decision should Karpentry make? Question 11 options: Sell before assembly, the company will be better off by $2 per unit. Sell before assembly, the company will be better off by $1 per unit. Process further, the company will be better off by $29 per unit. Process further, the company will be better off by $14 per unit. Wayne Company spent $13,000 to produce Product 612, which can be sold as is for $15,000, or processed further incurring additional costs of $11,500 and then be sold for $17,000. Which amounts are relevant to the decision about Product 612? Question 12 options: $13,000, $15,000, and $17,000 $15,000, $11,500, and $17,000 $13,000, $15,000, $11,500 and $17,000 $13,000, $11,500, and $17,000 The decision rule on whether to sell or process further Question 13 options: is process further if differential revenue from such processing exceeds differential fixed costs. is process further if differential revenue from such processing exceeds the differential processing costs. varies from situation to situation. is process further as long as total revenue exceeds present revenues. The focus of a sell or process further decision is Question 14 options: differential cost. differential revenue. neither differential revenue nor differential cost. both differential revenue and differential cost. Nelson Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials $120,000 Direct Labor 25,000 Variable Overhead 45,000 Fixed Overhead 20,000 If Nelson Manufacturing Company can purchase the component externally for $190,000 and only $5,000 of the fixed costs can be avoided, what is the correct make-or-buy decision? Question 15 options: Make and save $5,000 Make and save $15,000 Buy and save $15,000 Buy and save $5,000
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