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Please do every requirement, thanks. The Raleigh Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: (Click the icon
Please do every requirement, thanks.
The Raleigh Corporation manufactures filing cabinets in two operations: machining and finishing. It provides the following information: (Click the icon to view the department information.) Each cabinet sells for $85 and has direct material costs of $60 incurred at the start of the machining operation. Raleigh has no other variable costs. Raleigh can sell whatever output it produces. The following requirements refer only to the preceding data. There is no connection between the requirements. Read the requirements Requirement 1. Raleigh is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,350 units. The annual cost of these jigs and tools is $20,000. Should Raleigh acquire these tools? Show your calculations. Producing 1,350 more units will generate contribution (throughput) margin and operating income because Data Table - X 0 Requirements Annual capacity Annual production Fixed operating costs (excluding direct materials) Fixed operating costs per unit produced ($1,550,000 - 155,000; $930,000 - 155,000) Machining 180,000 units 155,000 units $1,550,000 $10 per unit Finishing 155,000 units 155,000 units $930,000 $6 per unit 1. Raleigh is considering using some modern jigs and tools in the finishing operation that would increase annual finishing output by 1,350 units. The annual cost of these jigs and tools is $20,000. Should Raleigh acquire these tools? Show your calculations. 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 13,000 units and would cost $22,000 per year. Should Raleigh implement the change? Show your calculations. 3. An outside contractor offers to do the finishing operation for 18,000 units at $18 per unit, triple the $6 per unit that it costs Raleigh to do the finishing in-house. Should Raleigh accept the subcontractor's offer? Show your calculations. 4. The Halton Corporation offers to machine 5,800 units at $5 per unit, half the $10 per unit that it costs Raleigh to do the machining in-house. Should Raleigh accept Halton's offer? Show your calculations. 5. Raleigh produces 2,800 defective units at the machining operation. What is the cost to Raleigh of the defective items produced? Explain your answer briefly. 6. Raleigh produces 2.800 defective units at the finishing operation. What is the cost to Raleigh of the defective items produced? Explain your answer briefly. Print Done Print DoneStep by Step Solution
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