Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Chapter 10, Problem 9PB
ZZOOM, Inc., has decided to discontinue manufacturing its Z Best model. Currently, the company has 4,600 partially completed Z Best models on hand. The government has put a recall on a particular part in the Z Best model, so each base model must now be reworked to accommodate the style of the new part. The company has spent $110 per unit to manufacture these Z Best models to their current state. Reworking each Z Best model will cost $22 for materials and $25 for direct labor. In addition, $9 of variable overhead and $34 of allocated fixed overhead (relating primarily to
If ZZOOM completes the Z Best models, it can sell them for $180 per unit. On the other hand, another manufacturer is interested in purchasing the partially completed units for $105 each and converting them into Z Plus models. Prepare a differential analysis per unit to determine if ZZOOM should complete the Z Best models or sell them in their current state.
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InteliSystems manufactures an optical switch that it uses in its final product. InteliSystems incurred the following manufacturing
costs when it produced 70,000 units last year:
E (Click the icon to view the manufacturing costs.)
InteliSystems does not yet know how many switches it will need this year; however, another company has offered to sell
InteliSystems the switch for $8.50 per unit. If InteliSystems buys the switch from the outside supplier, the manufacturing
facilities that will be idle cannot be used for any other purpose, yet none of the fixed costs are avoidable.
Read the requirements.
Requirement 1. Given the same cost structure, should InteliSystems make or buy the switch? Show your analysis.
Complete an incremental analysis to show whether InteliSystems should make or buy the switch. (Enter a "O" for any zero amounts. Round amounts to the nearest cent. Use a minus sign or parentheses when the cost to buy exceeds the cost to make.)
InteliSystems
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help me
WorldSystems manufactures an optical switch that it uses in its final product. WorldSystems incurred the following manufacturing costs when it produced 72,000
units last year:
WorldSystems does not yet know how many switches it will need this year; however, another company has offered to sell WorldSystems
$11.50 per unit. If WorldSystems buys the switch from the outside supplier, the manufacturing facilities that will be idle cannot be used fe
purpose, yet none of the fixed costs are avoidable.
E (Click the icon to view the manufacturing costs.)
Read the reguirements.
Requirement 1. Given the same cost structure, should WorldSystems make or buy the switch? Show your analysis.
Complete an incremental analysis to show whether WorldSystems should make or buy the switch. (Enter a "0" for any zero amounts. Round amounts to the nearest cent. Use a minus sign or parentheses when the cost to buy exceeds the cost to make.)
World Systems
Incremental Analysis for Outsourcing Decision
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Chapter 10 Solutions
Principles of Accounting Volume 2
Ch. 10 - ______ are the costs associated with not choosing...Ch. 10 - Which type of incurred costs are not relevant in...Ch. 10 - The managerial decision-making process has which...Ch. 10 - Which of the following is not one of the five...Ch. 10 - Which of the following is sometimes referred to as...Ch. 10 - Jansen Crafters has the capacity to produce 50,000...Ch. 10 - ______ is the act of using another company to...Ch. 10 - Which of the following is a disadvantage of...Ch. 10 - Which of the following is not a qualitative...Ch. 10 - Which of the following is one of the two...
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