Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

URGENT!!! Question: Huang Inc. (the company) manufactures appliances One of their divisions manufactures a time which are used in several of their appliances They produce

URGENT!!! image text in transcribed
image text in transcribed
image text in transcribed
Question: Huang Inc. (the company) manufactures appliances One of their divisions manufactures a time which are used in several of their appliances They produce 42,000 timers annually. The cost per unit for the timer is as follows: Description Cost Direct materials 4.80 Direct labour 1.60 Variable overhead 1.20 Fixed overhead 2.80 Total cost 10.40 Of the total fixed overhead assigned to the timers, $25,200 is directly traceable to the production of the timer. The remaining fixed overhead costs are common fixed overhead and therefore unavoidable. An outside supplier has offered to sell the timers to Huang Inc for $8.45 per unit. Required: Analyze the above information and determine if the company should make or buy If the company buys all of their timers, by how much would their operating income change? Enter your answer as a positive number If the company could rent out the space that is currently used to produce the timers for $19,000 per year, should the company make or buy the timers? Enter one of the following in the space provided: M for make, B for buy, or NA for Indifferent If the company buys the timers and then rents out the space that is currently used to produce the timers for $19,000 per year, by how much would their operating income change? Enter your answer as a positive number. Required: Analyze the above information and determine if the company should make or buy the timers. If there was no other alternative use for the facilities that is currently used to produce the timers, should the company make or buy the timers? Enter one of the following in the space provided: M for make, B for buy, or NA for indifferent What is the most that the company would be willing to pay an outside supplier for one timer? If the company buys the timers, would their operating income increase, decrease, or stay the same? Enter one of the following in the space provided: IN for increase. DE for decrease, and NA for stay the same

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

Advanced Accounting

Authors: Paul Fischer, William Taylor

6th Edition

0538841265, 978-0538841269

More Books

Students also viewed these Accounting questions

Question

Discuss all branches of science

Answered: 1 week ago