Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please please answer quickly and show math. i do not know what i did wrong or why 900,000 is wrong Exploiting Internal Linkages Woodruff Company

image text in transcribedimage text in transcribedplease please answer quickly and show math. i do not know what i did wrong or why 900,000 is wrong

Exploiting Internal Linkages Woodruff Company is currently producing a snowmobile that uses five specialized parts. Engineering has proposed replaci these specialized parts with commodity parts, which will cost less and can be purchased in larger order quantities. Curren activity capacity and demand (with specialized parts required) and expected activity demand (with only commodity parts required) are provided. Additionally, the following activity cost data are provided: Material usage: $25 per specialized part used; $30 per commodity part; no fixed activity cost. Installing parts: \$29 per direct labor hour; no fixed activity cost. Purchasing parts: Four salaried clerks, each earning a $46,000 annual salary; each clerk is capable of processing 7,100 purchase orders. Variable activity costs: $1.80 per purchase order processed for forms, postage, etc. 1. Calculate the cost reduction produced by using commodity parts instead of specialized parts. Enter your answers as positive amounts. If required, round your answers to the nearest cent. 2. Suppose that 71,000 units are being produced and sold for $9,000 per unit and that the price per unit will be reduced by the per-unit savings. What is the new price for the configured product? If required, round your intermediate calculations ar final answer to the nearest cent. X 3. What if the expected activity demand for purchase orders was 12,070 ? How would this affect the answers to Requirements 1 and 2? If required, round your intermediate calculations and final answers to the nearest cent. Total savings New price by $ by $ X to $ to $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions