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Requlred Information [The following information applies to the questions displayed below.] Rex Metal Fabricators (RMF) buys scrap metal and produces components for bulldings and other
Requlred Information [The following information applies to the questions displayed below.] Rex Metal Fabricators (RMF) buys scrap metal and produces components for bulldings and other structures. The purchase contracts specify an average quality level of 71 percent. That is, 71 percent of the metal must be ready for use without further processing. Metal that is not ready can be treated at extra cost by RMF, and this is more cost-effective than scrapping the metal and purchasing addlitional amounts. The cost of treating the metal requiring further processing is $80 per ton. RMF uses two suppliers: Chopin Yards and Joe Company. During the past year, the purchasing quality data were as follows: Requlred: Assume that the average quality, measured by the percentage of metal purchases requiring further processing, and prices from the two companies will continue as in the past. What is the effectlve price for metal from the two companies when quality Is considered? Note: Round your answers to 2 decimal places. Cairney, incorporated manufactures a speclalized part used in Internal combustion engInes. The annual demand for the part is 241,000 units. The facility has a practical capacity of 256,000 units annually. The company leased the current facility because facilities capable of manufacturing the unit require machines that can produce 64,000 units each. The annual cost of the facility is $962,560. The varlable cost of a part is $4 Requlred: a. What cost per unit should the cost system report to facilitate management decision making? Note: Round your answer to 2 decimal places. b. What is the cost of excess capacity
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