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Mighty Safe Fire Alarm is currently buying 62,000 motherboards from MotherBoard, Inc., at a price of $66 per board. Mighty Safe is considering making its own boards. The costs to make the board are as follows: direct materials, $29 per unit; direct labor, $12 per unit; and variable factory overhead, $16 per unit. Fixed costs for the plant would increase by $88,000. Which option should be selected and why? a. make, $469,960 increase in profits Ob.make, $558,000 increase in profits Oc. buy, $88,000 increase in profits Od. buy, $469,960 increase in profits Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $14.00 per unit. The unit cost for the business to make the part is $22.00, including fixed costs, and $10.00, not including fixed costs. If 34,077 units of the part are normally purchased during the year but could be manufactured using unused capacity, the amount of differential cost increase or decrease from making the part rather than purchasing it would be a Oa. $477,078 cost decrease Ob. $136,308 cost decrease Oc. $136,308 cost increase Od. $272,616 cost increase Myers Corporation has the following data related to direct materials costs for November: actual costs for 4,680 pounds of material at $5.00 and standard costs for 4,420 pounds of material at $6.30 per pound. The direct materials quantity variance is Oa. $6,084 favorable Ob. $1,638 unfavorable Oc. $1,638 favorable Od. $6,084 unfavorable Motorcycle Manufacturers, Inc., projected sales of 58,900 machines for the year. The estimated January 1 inventory is 6,130 units, and the desired December 31 inventory is 7,400 units. The budgeted production for the year is Oa. 58,900 Ob. 57,630 Oc. 45,370 Od. 60,170 Below is budgeted production and sales information for Flushing Company for the month of December Product XXX Product ZZZ Estimated beginning inventory Desired ending inventory Region I, anticipated sales Region II, anticipated sales 29,800 units 18,300 units 36,000 units 14,700 units 329,000 units 274,000 units 181,000 units 144,000 units The unit selling price for product XXX is $7 and for product ZZZ is $16. Budgeted sales for the month is Oa. $11,086,000 Ob. $14,848,000 Oc. $10,258,000 Od. $6,496,000 The standard costs and actual costs for factory overhead for the manufacture of 2,700 units of actual production are as follows: Standard Costs Fixed overhead (based on 10,000 hours) 3 hours per unit at $0.76 per hour 3 hours per unit at $1.90 per hour Variable overhead Actual Costs Total variable cost, $17,800 Total fixed cost, $8,100 The total factory overhead cost variance is . a. $3,854 favorable Ob. $2,410 unfavorable Oc. $5,298 favorable Od. $3,854 unfavorable
