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Need help on these problems I. ABC Company is currently operating below capacity and is considering manufacturing a key part used to produce its top

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I. ABC Company is currently operating below capacity and is considering manufacturing a key part used to produce its top selling product. The Company is purchasing this part Turner Corporation for 50. ABC estimates it can manufacture this part at the following costs Labor Materials 15 Variable factory overhead 15% of labor cost 10% of labor cost) Fixed factory overhead Prepare a report that compares the cost of purchasing the part from Turner with the cost of producing the part internally. Would you make or buy this part? ll. Jones Company is considering replacing an outdated piece of manufacturing equipment. The old equipment was purchased at an original cost of 500,000 a of $75,000. The new equipment costs 460,000 and will have a useful life of six years The old equipment can be sold for a price of 100.000. Variable operating expenses of the new equipment will amount to $40,000 per year over the next six years compared to an operating cost of 125,000 per year for the old equipment. Prepare a schedule comparing the two alternatives and decide which alternative would be best. Ill. Xerox Corporation has received an offer from Snider Distribution company to sell Snider 5,000 copy machines at a selling price of s 2,000 per machine. Xerox has unused production capacity of 15,000 machines. Currently, Zerox is selling the same machine for 2,500 per and its production costs consist of monthly costs of $85,000 and variable costs of 1,800 per a. Should zerox accept sniders offer Show calculations that support your decision. IV. Darrow Equipment has a piece of equipment that cost $200,000 and has 160,000 in accumulated depreciation at this time. Darrow can sell the equipment through a broker for 100,000 less a 5% sales commission or lease the equipment for five years at an annual rental of $40,000. Additionally, Darrow will incur repair, insurance, and taxes of 15,000 per year if it leases the equipment. Prepare a schedule showing the effect of either leasing or selling the equipment and what you would recommend Darrow doing

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