The Houston Corporation manufactures filing cabinets in two operations machining and finishing It provides the followng information (Click the icon to view the department information.) Each cabinot sels for $90 and has direct material costs of $60 incurred at the start of the machining operation. Houston has no other variable costs. Houston can nell Whatever output it produces. The following requirements refer only lo the procoding data. There is no connection botwoon the requirements. Read the roquirements. Requirement 1. Houston is considecing using some modern jigs and tools in the finishing operafon that would increase annual finishing output by 1,650 units. The annual cost of these jigs and lools is $25,000 Should Houston acquire these tools? Show your calculations Producing 1,650 more units will geneitate contribution (throughpul) margh and operating income becave finishing is a botlleneck operation, machining is not Select the formua, then enter the amounts lo calculate the change in throuphput consibution Data table 1. Houston is considering using some modem jigs and tools in the finishing operation that would increase annual finishing output by 1,650 units. The annual cost of these jigs and tools is $25,000. Should Houston acquire these tools? Show your calculations. 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 11,500 units and would cost $24,000 per year. Should Houston implement the change? Show your calculatioris. 3. An outside contractor offers to do the finishing operation for 15,000 units at $10 per unit, double the $5 per unit that it costs Houston to do the finishing in-house. Should Houston accept the subcontractor's offer? Show your calculations. 4. The Halliday Corporation offers to machine 6,000 units at $4 per unit, half the $8 per unit that it costs Houston to do the machining in-house. Should Houston accept Hallilday's offer? Show your calculations. 5. Houston produces 1,800 defective units at the machining operation. What is the cost to Houston of the defective items produced? Explain your answer briefly. 6. Houston produces 1,800 defective units at the finishing operation. What is the cost to Houston of the defective items produced? Explain your answer briefly. The Houston Corporation manufactures filing cabinets in two operations machining and finishing It provides the followng information (Click the icon to view the department information.) Each cabinot sels for $90 and has direct material costs of $60 incurred at the start of the machining operation. Houston has no other variable costs. Houston can nell Whatever output it produces. The following requirements refer only lo the procoding data. There is no connection botwoon the requirements. Read the roquirements. Requirement 1. Houston is considecing using some modern jigs and tools in the finishing operafon that would increase annual finishing output by 1,650 units. The annual cost of these jigs and lools is $25,000 Should Houston acquire these tools? Show your calculations Producing 1,650 more units will geneitate contribution (throughpul) margh and operating income becave finishing is a botlleneck operation, machining is not Select the formua, then enter the amounts lo calculate the change in throuphput consibution Data table 1. Houston is considering using some modem jigs and tools in the finishing operation that would increase annual finishing output by 1,650 units. The annual cost of these jigs and tools is $25,000. Should Houston acquire these tools? Show your calculations. 2. The production manager of the Machining Department has submitted a proposal to do faster setups that would increase the annual capacity of the Machining Department by 11,500 units and would cost $24,000 per year. Should Houston implement the change? Show your calculatioris. 3. An outside contractor offers to do the finishing operation for 15,000 units at $10 per unit, double the $5 per unit that it costs Houston to do the finishing in-house. Should Houston accept the subcontractor's offer? Show your calculations. 4. The Halliday Corporation offers to machine 6,000 units at $4 per unit, half the $8 per unit that it costs Houston to do the machining in-house. Should Houston accept Hallilday's offer? Show your calculations. 5. Houston produces 1,800 defective units at the machining operation. What is the cost to Houston of the defective items produced? Explain your answer briefly. 6. Houston produces 1,800 defective units at the finishing operation. What is the cost to Houston of the defective items produced? Explain your answer briefly
