ncroft currently manufactures a subcomponent that is used in its main product. A supplier has offered to supply all the subcomponents needed at a price of $240. Bancroft currently produces 20,000 subcomponents at the following manufacturing costs: Cost per Unit Direct materials $ 90 Direct labor
Q: Aikman Corporation has the following cost records for June 2022: $5,000 Factory utilities 25,200…
A: The cost of goods manufactured includes the cost of goods that are finished during the period. The…
Q: Exercise 6-19 (Algo) Long-term contract; revenue recognition over time and at a point in time…
A: The revenue and expenses of a construction contract may be recorded under the percentage of…
Q: Prepare the appropriate journal entries for each of the following transactions in 2014. (Credit…
A: Face value = $736,000 Interest = 6% Issue price = 102
Q: Discuss what you believe is the most important difference in how cost allocation differs in service…
A: Costing is defined as a mechanism used to determine the expenses paid by the industry while…
Q: Enter the missing values in the following selected financial statements (partial) that are available…
A: Missing numbers can be calculated by using the basic formulas of income statement and balance sheet.…
Q: Larkspur Company leases an automobile with a fair value of $20,991 from Matthew Motors, Inc., on the…
A: High-value assets like machinery, equipment, vehicles, or real estate are frequently purchased…
Q: Capitol, Incorporated has received a special order for 2,000 units of its product at a special price…
A: Short-term profit alone does not provide a comprehensive view of a company's overall financial…
Q: The Retained earnings account has a credit balance of $51,000 before closing entries are made.…
A: Closing Journal Entry: It is the process of transferring the balance of temporary accounts to…
Q: Part A 4000 -4,400 The Lopez company uses standard costing for a level output of units per year,…
A: A variance is the discrepancy between a planned, budgeted, or standard cost and the actual sum…
Q: The pretax financial income (or loss) figures for Windsor Company are as follows. 2022 $82,000 2023…
A: Journal entry It is a record of a day-to-day business transactions in the business books. In…
Q: Actual overhead costs recorded during the firs Required: 1. Prepare a journal entry showing the…
A: Working Note #1:— Predetermined Overhead rate = Total Estimated manufacturing overhead cost/Total…
Q: A company issued a bond with a face value of $1,000,000 and a coupon rate of 8%. The bond pays…
A: To calculate the annual interest expense and the total interest expense over the life of the bond,…
Q: On January 1, 2025, Oriole Co. issued ten-year bonds with a face amount of $5000000 and a stated…
A: Investors buy bonds as a way to generate income and preserve capital. Bondholders receive regular…
Q: If Blue Corporation elects to amortize the research and experimental expenditures over 60 months,…
A: The systems theory of management offers a helpful framework for comprehending the intricate…
Q: ACE-225 Inc. has a shoes and a shirts division. The company reported the following segmented income…
A: Contribution margin is computed by deducting the variable expenses from the sales revenue.…
Q: Granite Lime Nina Total Sales revenue $ 500,000 $275,000 $225,000 $1,000,000 Variable costs 175,000…
A: Net profit or loss is the amount of income earned or loss incurred by the entity. It is shown in the…
Q: Fickel Company has two manufacturing departments-Assembly and Testing & Packaging. The predetermined…
A: Manufacturing costs are outlays made while a product is being produced. Sum of Costs for direct…
Q: Does it go under balance per bank statement or balance per books for reconciliation worksheet?
A: In this question, the actual amount of Cheque no. 735 was $ 767. The same is recorded in the books…
Q: Diane is a single taxpayer who qualifies for the earned income credit. Diane has two qualifying…
A: Please find the calculation of Earned Income Credit (EIC) of Diane in step 3 below.
Q: Mission Foods produces two flavors of tacos-chicken and fish-with the following characteristics.…
A: The ratio of each product that a company sells in relation to overall sales is calculated using the…
Q: Falon Corporation is issuing new common stock at a market price of $28. Dividends last year were…
A: To calculate Falon Corporation's cost of common equity capital, we can use the dividend growth…
Q: Cullumber Corporation issued $7,680,000 of 8% bonds on October 1, 2024, due on October 1, 2029. The…
A: The bonds can be issued at par or premium, when the bonds are issued at discount and it can be…
Q: Colorado Mining paid $616,000 to acquire a mine with 44,000 tons of coal reserves. The financial…
A: Lets understand the basics. Depletion method is used where extraction of minerals are made by the…
Q: Helix Corporation uses the weighted-average method in its process costing system. It produces…
A: Equivalent units of production are the amount of work done by a manufacturer on units of output that…
Q: The Greenback Store’s cost structure is dominated by variable costs with a contribution margin ratio…
A: Operating profit is the amount of profit earned by the entity after deducting the cost of goods sold…
Q: Volutia Corporation's comparative financial statements included the following amounts for the…
A: A CFS (cash flow statement) is a financial statement showing the amount coming in (inflow) and going…
Q: JAR-499 tour company uses two measures of activity, routes and passengers in its cost formulas used…
A: Variance is the difference between the actual costs and the budgeted costs. These are determined to…
Q: Mothercity Traders is a gift shop in Cape Town. Mothercitx Traders uses the perpetual inventory…
A: Lets understand the basics. Accounting equation shows that assets are always equals to equity plus…
Q: higher price: a. A three-year zero-coupon bond or a five-year zero-coupon bo b. A three-year…
A: The analysis of bond prices based on the time to maturity and coupon rates is accurate. In each…
Q: 1. Initial Description Item Description a. Down payment (capital cost reduction) b. Security deposit…
A: A lease is a contract wherein one party offers another party the right to use real estate or other…
Q: Cost allocation is often the centerpiece of conflict that is resolved in court cases. The litigation…
A: The operating department receives the expense of a department under the direct method.A service…
Q: Assets Current assets Cash Accounts receivable Inventory Total 2020 $ 11,000 $14,250 27,000 36,750…
A: The current ratio indicates the ability in terms of meeting its short-term obligation. It also…
Q: Robinson Products Company has two service departments (S1 and S2) and two production departments (P1…
A: S1 S2 P1 P2 S1 - 20% 30% (100-20-30) = 50% S2 20% - (100-20-40) = 40% 40%
Q: A company had the following assets and liabilities at the beginning and end of this year. Beginning…
A: Stockholders' equity: Stockholders' equity means the net assets available to shareholders after…
Q: Employee D. Balestreri Y. Milligan H. Curran D. Liberti Single Single Filing Status Married/Joint…
A: The Internal Revenue Service is the statutory body which monitors on U.S.' civil tax laws and…
Q: Determine the amount of the child tax credit in each of the following cases: 1. A single parent with…
A: The child tax credit is $2,000 for each dependent child under the age of 17 claimed on your tax…
Q: Oriole Machining purchased the assets of an existing business on June 30, 2020. It immediately…
A: A component refers to a part or element of an asset that is separately identifiable and has a cost…
Q: Accounting A company purchased a patent for $50,000 with a remaining legal life of 10 years.…
A: AMORTIZATION EXPENSE Amortization expenses are charged to the intangible assets. basically, it…
Q: In the past, Taylor Industries has used a fixed-time period inventory system that involved taking a…
A: ABC Analysis It is an inventory classification method that differentiate the goods into three…
Q: The company has a shoes and a shirts division. The company reported the following segmented income…
A: The contribution margin is calculated as difference between sales and variable costs. The…
Q: n 2022, Tom and Alejandro Jackson (married filing jointly) have $220,000 of taxable income before…
A:
Q: Compute the internal rate of return for each of the projects using excel functions. (Round your…
A: Internal rate of return is the rate at which company analysis the cash flows of the project at which…
Q: Car Armour sells car wash cleaners. Car Armour uses a perpetual inventory system and made purchases…
A: The specific identification method relates to inventory valuation, specifically keeping track of…
Q: Swifty Company is considering a long-term investment project called ZIP. ZIP will require an…
A: The question is based on the concept of Financial Management. NPV is the difference between the…
Q: Calvin reviewed his canceled checks and receipts this year (2022) for charitable contributions,…
A: Please find the calculation of charitable contributions & carryover in step 2 below.
Q: Camden Biotechnology began operations in September 2021. The following selected transactions relate…
A: Journal Entry - Journal entry is the recording of business transaction in books of account, this is…
Q: rk 3.4 K American General offers a 9-year annuity with a guaranteed rate of 8.96% compounded…
A: Time value of money :— According to this concept, value of money in present day is greater than the…
Q: Required Information [The following information applies to the questions displayed below] Deliberate…
A: Balance sheet :— It is one of the type of financial statements that shows list of final ending…
Q: Alpha Industries manufactures and sells two models of watches, Prime and Delox. It expects to sell…
A: The budgeted cost of purchase is the amount required for purchasing the required inventory for a…
Q: On 24 December after the close of business, a devastating fire at Solaris Pharmaceutical destroyed…
A: To estimate the cost of the destroyed raw material inventory and finished goods inventory, we first…
Bancroft currently manufactures a subcomponent that is used in its main product. A supplier has offered to supply all the subcomponents needed at a price of $240. Bancroft currently produces 20,000 subcomponents at the following
| Cost per Unit | |
|---|---|
| Direct materials | $ 90 |
| Direct labor | 60 |
| Variable manufacturing overhead | 70 |
| Fixed manufacturing overhead | 50 |
| Total unit cost | $ 270 |
Required:
- If Bancroft has no alternative uses for the manufacturing capacity, what would be the profit impact of buying the subcomponents from the supplier?
- If Bancroft has no alternative uses for the manufacturing capacity, what would be the maximum price per unit Bancroft should be willing to pay the supplier?
- Now assume Bancroft would avoid $640,000 in equipment leases and salaries if the subcomponent were purchased from the supplier. Now what would be the profit impact of buying from the supplier?
Step by step
Solved in 3 steps with 6 images
- A company is considering a special order for 1,000 units to be priced at 8.90 (the normal price would be 11.50). The order would require specialized materials costing 4.00 per unit. Direct labor and variable factory overhead would cost 2.15 per unit. Fixed factory overhead is 1.20 per unit. However, the company has excess capacity, and acceptance of the order would not raise total fixed factory overhead. The warehouse, however, would have to add capacity costing 1,300. Which of the following is relevant to the special order? a. 11.50 b. 1.20 c. 7.35 d. 8.90Concord Corporation manufactures widgets. Bowden Company has approached Concord with a proposal to sell the company widgets at a price of $88000 for 100000 units. The following costs are associated with Concord's production process when 100000 units are produced: Direct material Direct labor Manufacturing overhead Total $ 33000 29500 48500 $111000 Manufacturing overhead of $12150 of costs will be eliminated if the components are no longer produced by Concord. What is the incremental cost or savings to Concord if the widgets are bought instead of made? $23000 incremental savings $13350 incremental cost $10850 incremental savings $23000 incremental costBaird Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. $ 6,500 6,400 4,100 9,600 27,900 Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Baird for $2.60 each. Required a. Calculate the total relevant cost. Should Baird continue to make the containers? b. Baird could lease the space it currently uses in the manufacturing process. If leasing would produce $11,200 per month, calculate the total avoidable costs. Should Baird continue to make the containers? a. Total relevant cost Should Baird continue to make the containers? b. Total avoidable cost Should Baird continue to make the containers?
- Perez Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials $ 6,000 6,900 3,600 8,400 26,500 Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Perez for $2.80 each. Required a. Calculate the total relevant cost. Should Perez continue to make the containers? b. Perez could lease the space it currently uses in the manufacturing process. If leasing would produce $12,800 per month, calculate the total avoidable costs. Should Perez continue to make the containers? a. Total relevant cost Should Perez continue to make the containers? b. Total avoidable cost Should Perez continue to make the containers?Campbell Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,200 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 6,900 6,400 4,100 9,600 26,600 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Campbell for $2.80 each. Required a. Calculate the total relevant cost. Should Campbell continue to make the containers? b. Campbell could lease the space it currently uses in the manufacturing process. If leasing would produce $12,800 per month, calculate the total avoidable costs. Should Campbell continue to make the containers? a. Total relevant cost Should Campbell continue to make the containers? b. Total avoidable cost Should Campbell continue to make the containers?Vernon Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $5,700 6,500 3,200 8,400 27,100 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Vernon for $2.60 each. Required a. Calculate the total relevant cost. Should Vernon continue to make the containers? b. Vernon could lease the space it currently uses in the manufacturing process. If leasing would produce $12,700 per month, calculate the total avoidable costs. Should Vernon continue to make the containers? a. Total relevant cost a. Should Vernon continue to make the containers? b. Total avoidable cost b. Should Vernon continue to make the containers?
- Rooney Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* $ 5,200 6,500 3,600 9,300 26,600 Allocated facility-level costs *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rooney for $2.70 each. Required a. Calculate the total relevant cost. Should Rooney continue to make the containers? b. Rooney could lease the space it currently uses in the manufacturing process. If leasing would produce $11,500 per month, calculate the total avoidable costs. Should Rooney continue to make the containers? a. Total relevant cost Should Rooney continue to make the containers? b. Total avoidable cost Should Rooney continue to make the containers?Thornton Electronics currently produces the shipping containers It uses to deliver the electronics products It sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 5,100 6,400 3,300 9,900 28,000 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Thornton for $2.60 each. Required a. Calculate the total relevant cost. Should Thornton continue to make the containers? b. Thornton could lease the space it currently uses in the manufacturing process. If leasing would produce $12,100 per month, calculate the total avoidable costs. Should Thornton continue to make the containers? a. Total relevant cost a. Should Thornton continue to make the containers? b. Total avoidable cost b. Should Thornton continue to make the containers?Jordan Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs Allocated facility-level costs $ 5,700 6,800 3,900 8,100 27,200 One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Jordan for $2.90 each. Required a. Calculate the total relevant cost. Should Jordan continue to make the containers? b. Jordan could lease the space it currently uses in the manufacturing process. If leasing would produce $12.300 per rhonth, calculate the total avoidable costs. Should Jordan continue to make the containers? a. Total relevant cost Should Jordan continue to make the containers? b. Total avoidable cost Should Jordan continue to make the containers?
- Rundle Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials. Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rundle for $2.60 each. Required a. Calculate the total relevant cost. Should Rundle continue to make the containers? b. Rundle could lease the space it currently uses in the manufacturing process. If leasing would produce $11,600 per month, calculate the total avoidable costs. Should Rundle continue to make the containers? Answer is complete but not entirely correct. $ a. Total relevant cost a. Should Rundle continue to make the containers? b. Total avoidable cost b. Should Rundle continue to make the containers? 190.650,000 Yes $24,180,000 $ 5,200 6,100 4,000 7,800…ABC company manufactures a particular computer component. Currently, the cost per unit is as follows: Direct Materials;P50, Direct Labor,P500; Variable Overhead,P250; Fixed Overhead,P400XYZ company has obtained with an offer to sell 10,000 units of the component for P1,100 per unit. If ABC accepts the proposal, P2,500,000 of the fixed overhead will be eliminated. Should ABC make or buy the component? Select the correct response: Make due to savings of P3,000,000 Buy due to savings of P1,000,000 Buy due to savings of P2,500,000 Make due to savings of P500,000Finch Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,200 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 6,400 6,000 4,000 11,400 27,300 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Finch for $2.70 each. Required a. Calculate the total relevant cost. Should Finch continue to make the containers? b. Finch could lease the space it currently uses in the manufacturing process. If leasing would produce $11,000 per month, calculate the total avoidable costs. Should Finch continue to make the containers? a. Total relevant cost Should Finch continue to make the containers? b. Total avoidable cost Should Finch continue to make the containers?
