Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

seee photos The management of Carla Vista Manufacturing Company is trying, to decide whether to continue manufacturing a part or to buyit from an outside

seee photos
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
The management of Carla Vista Manufacturing Company is trying, to decide whether to continue manufacturing a part or to buyit from an outside supplier. The part, called CISCO, is a component of the companys finished product. The following information was collected from the accounting records and production data for the year ending December 31,2022. 1. 8,100 units of C1SCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CisCO unit were: direct materials $5.10, direct labor $4,89, indirect labor $0.42, utilities $0.35. 3. Fixed manufacturing costs applicable to the production of CISCO were: All variable manufacturing and direct fixed costs will be eliminated if CisCO is purchased. Allocated costs will not be eliminated if All variable manufacturing and direct fixed costs will be eliminated if CISCO is purchased. Allocated costs will not be el CISCO is purchased. So if CISCO is purchased, the fixed manufacturing costs allocated to CISCO will have to be absorb production departments. 4. The lowest quotation for 8,100CISCO units from a supplier is $87,328. 5. If CISCO units are purchased, freight and inspection costs would be $0.38 per unit, and receiving costs totaling $1,29 would be incurred by the Machining Department. (a) Prepare an incremental analysis for CISCO. (Enter negative amounts using either a negative sign preceding the 45 or parentheses e.8. (45).) (b) Based on your analysis, what decision should management make? (b) Based on your analysis, what decision should management make? The company should (c) Would the decision be different if Carla Vista Company has the opportunity to produce $3,000 of net income with the facilitics currently being used to manufacture CISCO

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

Analysing Financial Statements For Non-Specialists

Authors: Jim OHare

2nd Edition

1138641529, 9781138641525

More Books

Students also viewed these Accounting questions

Question

Review the list of futures contracts traded on the exchanges.

Answered: 1 week ago

Question

13.6 Explain how to set up aflexible benefits program.

Answered: 1 week ago

Question

13.2 Describe five government-mandated benefits.

Answered: 1 week ago