Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Moon's Manufacturing Company can make 1,000 units of a necessary component part with the following costs: Direct Materials $24,000 Direct Labor 16,000 Variable Overhead 4,000

image text in transcribedimage text in transcribedimage text in transcribed

Moon's Manufacturing Company can make 1,000 units of a necessary component part with the following costs: Direct Materials $24,000 Direct Labor 16,000 Variable Overhead 4,000 Fixed Overhead 7,000 If Moon's Manufacturing Company purchases the component extemally, $3,000 of the fixed costs can be avoided. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Moon Company would accept to acquire the 1,000 units externally? $51,000 $47,000 $48,000 O $44,000 O None of the above Home, Inc. can produce 100 units of a component part with the following costs: Direct Materials $30,000 Direct Labor 13,000 Variable Overhead 32,000 Fixed Overhead 22,000 If Home Inc. can purchase the component part externally for $88,000 and only $8,000 of the fixed costs can be avoided, what is the correct make-or-buy decision? Make and save $1,000 Buy and save $1,000 O Make and save $5,000 O Buy and save $13,000 O None of the above Freddy Company has the following unit cost behavior, based on 10,000 units: * $ 4 10 Direct materials Direct labor Variable overhead Fixed overhead 8 6 A foreign company wants to purchase 2,000 units at a special unit price of $25. The normal price per unit is $40. In addition, a special stamping machine will have to be purchased for $6,000 in order to stamp the foreign company's name on the product. The order can be fulfilled using the company's existing capacity without affecting any other order. The incremental income (loss) from accepting the order is: $(1,000) O $(2,000) $2,000 $4,000 O None of the above

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

Step: 3

blur-text-image

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

Internal Audit Quality Developing A Quality Assurance And Improvement Program

Authors: Sally-Anne Pitt

1st Edition

1118715519, 978-1118715512

More Books

Students also viewed these Accounting questions

Question

What has been your desire for leadership in CVS Health?

Answered: 1 week ago

Question

Question 5) Let n = N and Y Answered: 1 week ago

Answered: 1 week ago