Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

show your work please Take me to the text Balk Company is currently manufacturing Part P128. It produces 53,700 units of Part P128 per year.

show your work please image text in transcribed
image text in transcribed
Take me to the text Balk Company is currently manufacturing Part P128. It produces 53,700 units of Part P128 per year. This part is used in the manufacturing of many products produced by Balk. The breakdown of the cost per unit for P128 is shown below. Direct Materials $6.00 Direct Labor $3.00 Variable Overhead $1.00 Fixed Overhead $1.50 Unit Cost $11.50 The fixed overhead cost (at $1.50/unit above) would still remain with the company even if Balk stops manufacturing Part P128. An outside supplier has offered to sell the same part to Balk for $17.00. Currently, there is no alternative use for the capital assets used to produce Part P128. These capital assets will not be sold if the company chooses to buy Part P128. Do not enter dollar signs or commas in the input boxes. Use the negative sign for a negative change in operating income a) Should Baik Company make or buy Part P128? Cost to Make: $ Cost to Buy: S Therefore Balk should b) What is the maximum price Balk should be willing to pay an outside supplier for the part? Maximum Price: 5 Chif Balk buys the part for $14 instead of maling it by how much will operating income increase or decrease? Change in operating income: $ Take me to the text Manusys is considering whether to repair or replace its manufacturing equipment. It is now in need of repairs that will cost $39,000. It has three years left of its useful life. Manusys must determine whether to go ahead with the repairs, or to purchase a new machine to replace the old one. A new, more efficient machine costs $286,000 and will have an 3-year useful life, after which it will have no salvage value. The new machine would reduce variable manufacturing costs from $171,000 to $136,000 annually. As well, the old machinery can be sold for $61,000 Do not enter dollar signs.or.commas in the input boxes Use the negative sign for values that must be subtracted, Indicate tenait or replace using the drop downlist a) Prepare a differential analysis based on the remaining useful life a years) of the old machinery without consideration of the time value of money or depreciation expense on the asset Repair Equipment Replace Equipment Difference Variable MOH $ s $ Repairs costs $ S s New Machine costs 5 5 Sale of Old Machines $ Total costs 5 5 Should Marusys repair or replace its manufacturing equipment

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_2

Step: 3

blur-text-image_3

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

Research Methods For Accounting And Finance Global Management Series

Authors: Audrey Paterson, Kevin D. Ogorman, David Leung, Robert Macintosh, William Jackson

1st Edition

1910158895, 978-1910158890

More Books

Students also viewed these Accounting questions

Question

15.2 Explain the costs associated with employee turnover.

Answered: 1 week ago