Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Score: 0.88 of 1 pt %E8-28A (similar to) 7 of 9 (9 completo) RootSystems manufactures an optical switch that it uses in its final product

image text in transcribed
image text in transcribed
image text in transcribed
Score: 0.88 of 1 pt %E8-28A (similar to) 7 of 9 (9 completo) RootSystems manufactures an optical switch that it uses in its final product RootSystems incurred the following manufacturing costs when it produced 67,000 units last year (Click the icon to view the manufacturing costs.) RootSystems does not yet know how many switches it will nee RootSystems the switch for $14.00 per unit if RootSystems facilities that will be idle cannot be used for any other purpose, Read the requirements Requirement 1. Given the same cost structure, should RootSystems make or buy the switch? Show your analysis Complete an incremental analysis to show whether RootSystems should make or buy the switch. (Enter a "O" for any zoro amounts. Round amounts to the nearest cont. Use a minus sign make.) RootSystems Data Table Incremental Analysis for Outsourcing Decision Make Unit Direct materials 737,000 Variable cost per unit: Direct labor 167,500 Direct materials 11.00 Variable MOH 134,000 Direct labor Fibed MOH 435,500 Variable overhead Total manufacturing cost for 67.000 units $ 1,474,000 Purchase price from outsider 14.00 (14.00) Total variable cost per unit 15.50 14.00 1.50 Print Done Decision Buy the optical switch because the variable cost per unit to make the switch is greater than the variable cost per unit to buy the switch Requirement 2. Now, assume that RootSystems can avoid $105,000 of food costs a year by outsourcing production. In addoon, because sales are increasing, RootSystems needs 72.000 switch should the company do now? Complete an outsourcing decision analysis assuming fixed costs can be avoided by outsourcing production and the number of units needed have increased Choose from any list or enter any number in the input fields and then click Check Answer. All parts showing Clear All MacBook Pro Question Help 0 ncurred the following RootSystems does not yet know how many switches it will need this year, however, another company has offered to sell Rootsystems the switch for $14.00 per unit. If RootSystems buys the switch from the outside supplier, the manufacturing facilities that will be idle cannot be used for any other purpose, yet none of the fixed costs are avoidable. tch? Show your analysis switch. (Enter a "0" for any zero amounts. Round amounts to the nearest cont. Use a minus sign or parentheses when the cost to buy exceeds the cost to Requirements 11.00 2.50 2.00 14.00) 1.50 1. Given the same cost structure, should RootSystems make or buy the switch? Show your analysis 2. Now, assume that RootSystems can avoid $105,000 of fixed costs a year by outsourcing production. In addition, because sales are increasing, RootSystems needs 72,000 switches a year rather than 67,000 switches. What should the company do now? 3. Given the last scenario, what is the most RootSystems would be willing to pay to outsource the switches? Print Done ch is greater than the variable cost per breve wear by outsourcing production. In addition, because sales are increasing, RootSystems needs 72,000 switches a year rather than 67.000 switches. What tsourcing production and the number of units needed have increased. kAnswer. Clear All Final Check 7 of 9 (9 completo) HW Score: 97 E8-28A (similar to) Nosytems manufactures an option with that it uses in its final product. RootSystems incurred the following manufacturing costs when produced 07,000 units last year Chok the toon to view the manufacturing costs) RootSystems does not yet know how many switches it will need this year, however, another compa RootSystems the switch for $14.00 per unit. If Rootsystem buys the switch from the outside suppo facilities that will be ide cannot be used for any other purpose, yet none of the forced costs are avaid Buy Read the requirements UUSourcing Decision Make switches Variable cost per unit $ 15.50 Units needed 72.000 Total variable costs 1.116.000 435.500 Switches $ 14.00 72.000 1.000.000 330.500 Total olevant costs $ 1.561.500 S 1,338.500 Decision Buy the optical switch because the total relevant costs to make the switches are greater than the relevant costs to buy the switches Requirement. Given the last scenario what is the most RootSystems would be willing to pay to outsource the switches? Begin by identifying the basis formula that is used to determine the indifferent outsourcing cost per unit Cost making switches Variable costs Feed costs Cost outsourcing watches Variable costs Food costs Using the basic formula you determined above, solve for the outsourcing cost at which HotSystems would be indifferent between outsourcing and making the switches (Enter your per un calculation to the nearest cont.) RootSystems would be indiferent between outsourcing and making the switches if the outsourcing cost was $ 1221000 per switch. Therefore, Systems will only be willing to outsource if the outsourcing cost is loss than $ 17.00 switch Choose from any list or enter any number in the input fields and then click Check Answer A parts showing Clear Al Final Chec MacBook Pro

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Information Technology Auditing And Assurance

Authors: James A. Hall, Tommie Singleton

2nd Edition

0324191987, 978-0324191981

More Books

Students also viewed these Accounting questions

Question

At what level(s) was this OD intervention scoped?

Answered: 1 week ago