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XYZ Industries manufactures 22,000 components per year. The total manufacturing costs for this level of production were determined as follows: Direct Materials $134,000 Direct Labor
XYZ Industries manufactures 22,000 components per year. The total manufacturing costs for this level of production were determined as follows: Direct Materials $134,000 Direct Labor $171,000 Variable manufacturing overhead $30,000 Fixed manufacturing overhead $66,000 An outside supplier has offered to produce all 22,000 units of the component and sell it to XYZ for $11 per unit. Additional information: If XYZ purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $49,000 per year. XYZ has determined that no fixed manufacturing overhead could be avoided by purchasing the component from the supplier. What is the total annual financial impact of purchasing the component from the supplier instead of manufacturing it themselves? (Make sure to calculate the total impact, not the per-unit amount. Use a negative number to indicate a reduction in cash flows.) A company makes a single product that is normally sells for $53/unit. It has the capacity to produce 100,000 units per year, but currently produces only 70,000. Per-unit costs associated with the product at an annual production level of 70,000 are below: $30 Variable production cost per unit Variable selling cost per unit $18 Fixed production cost per unit $13 Fixed selling cost per unit $20 A foreign distributor wants to buy 4,000 units and has offered to pay $50 each. Additional Information: > If the company accepts this order, it would incur $6,000 In additional legal costs to comply with export regulations. No selling costs would be incurred for this order, What would be the total financial impact of accepting this offer? (Make sure to calculate the total impact, not the per-unit amount. Use a negative number to Indicate a decrease in cash flows.) A company produces and sells three products. Product 1 Product 2 Product 3 $70 $100 $200 $50 $88 $80 Selling price per unit Contribution margin per unit Fixed cost per unit Machine hours per unit $10 $14 $25 5 5 10 This company has enough machine hours to make as many units as it can sell of its two most profitable products. If the company has the opportunity to rent as many more machine hour; as it needs, what is the most it would be willing to pay per machine ur? (Round to the nearest dollar and cents.) VICCERIAS
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