Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista

Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $3.50 per switch. Vista's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows:

Machine A Machine B

Annual fixed costs $333,200 $450,000

Variable cost per switch 1.12 0.50

Required:

1.For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost?

2 What volume level would produce the same total costs regardless of the machine purchased?(Do not round intermediate calculations. Round your answer up to the nearest whole number.)

Volume level[ ]units

3What is the most profitable alternative for producing 190,000 switches per year and what is the total cost of that alternative?

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

Corporate Financial Accounting

Authors: Carl S Warren, James M Reeve, Jonathan Duchac

11th Edition

0538480920, 9780538480925

More Books

Students also viewed these Accounting questions

Question

=+b) Obtain a forecast for the week of May 28, 2007.

Answered: 1 week ago

Question

A2 =

Answered: 1 week ago

Question

Solve the equation. Be sure to check your solution. = - m 65.9 9.6

Answered: 1 week ago

Question

Personal role: This consists of service to family and friends.

Answered: 1 week ago

Question

The role of life: It consists of your own service to yourself.

Answered: 1 week ago