Part E

The Glister Company, a machine tooling firm, has several plants One plant, located in St Cloud, Minnesota, uses a job order costing system for its batch production processes. The St Cloud plant has two departments through which most jobs pass. Plant-wide overhead, which includes the plant manager's salary, accounting personnel, cafeteria, and human resources, is budgeted at $200,000. During the past year, actual plantwide overhead was $183,000. Each department's overhead consists primarily of depreciation and other machine related expenses. Selected budgeted and actual data from the St Cloud plant for the past year are as follows. Department A Departments $ 120.000 125.000 $ 300,000 323.000 Hudgeted department overhead (excludes plantede overhead) Actual department overhead Expected total activity Direct labor hours Machine hours Actual activity: Direct labor hours Machine-hours 30,000 15.000 10,000 44.000 40,000 15,500 8,600 46.000 For the coming year, the accountants at the St Cloud plant are in the process of helping the sales force create bids for several jobsProjected data pertaining only to job no. 110 are as follows $17.000 33,000 11,000 Direct materials Direct Labor costi Department A (2.200 hr) Department (500 hr) Machine-hours projected: Department Department Units produced 150 1,200 11.000 1. Would your response to parte change if the St. Cloud plant could use the facilities necessary to produce parts for job no. 110 for another job that could earn an incremental profit of $17,000? Incremental profit earned by producing the other job Incremental cost of buying the parts from the subcontractor increase in total profits BE The Glister Company, a machine tooling firm, has several plants. One plant, located in St. Cloud, Minnesota. uses job order costing system for its batch production processes. The St Cloud plant has two departments through which most Jobs pass Plant-wide overhead, which includes the plant manager's salary, accounting personnel, cafeteria, and human resources, is budgeted at $200.000 During the past year, actual plantwide overhead was 5183.000. Each department's overhead consists primarily of depreciation and other machine-related expenses. Selected budgeted and actual data from the St Cloud plant for the past year are as follows Department Department Budgeted department overhead (excludes plantide overhead) $ 120,000 5308,000 Actual department overhead 125,000 323.000 Expected total activity: Direct labor hours 38.000 10,000 Machine-hours -15,000 44,000 Actual activity: Direct labor hours 40,000 8.600 Machine-hours 15.500 46,000 For the coming year, the accountants at the St Cloud plant are in the process of helping the sales force create bids for several jobs. Projected data pertaining only to job no. 110 are as follows: $17,000 33,000 11,000 Direct materials Direct labor cost Department A (2,200 he Department (500 hr) Machine-hour's projected: Department A Department Units produced 150 1,200 11,000 . Would your response to parte change if the St Cloud plant could use the facilities necessary to produce parts for job no 110 for another job that could earn an incremental profit of $17,000? Incremental profit earned by producing the other job Incremental cost of buying the parts from the subcontractor Increase in total profits ** LOCUS SEDIH, LUCU JUHUL, US] order costing system for its batch production processes. The St. Cloud plant has two departments through which most Jobs pass. Plant-wide overhead, which includes the plant manager's salary, accounting personnel, cafeteria, and human resources, is budgeted at $200.000. During the past year, actual plantwide overhead was $183,000. Each department's overhead consists primarily of depreciation and other machine-related expenses Selected budgeted and actual data from the St Cloud plant for the past year are as follows. Department $ 120.000 125,000 Department $300,000 323,000 Budgeted department overhead (excludes plantude overhead) Actual department overhead Expected total activity Direct Labor hours Machine-hours actual activity! Direct labor hours Machine hours 30,000 15.000 10.000 44,000 40,000 15.500 3,000 46,000 For the coming year, the accountants at the St. Cloud plant are in the process of helping the sales force create bids for several jobs. Projected data pertaining only to job no. 110 are as follows $17.000 Direct saterials Direct labor cost Department A (2.200 hr) Department (500 h) Machine-hours-projecte Department Departments Units produced 33.000 11.000 150 1,200 11,000 e. A St Cloud subcontractor has offered to produce the parts for job no. 110 for a price of $75 per unit. Assume the St. Cloud sales force has already committed to the bid price based on the calculations in part b. Should the St Cloud plant buy the $75 per unit part from the subcontractor or continue to make the parts for job no. 110 itself? O Buy part from the subcontractor Continue to make the part