Manson Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers tomake 10,400 of the assembly part at $6 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare ananalysis showing the total cost saving, if any, Manson will realize by buying the part. (Enter negative amounts using either a negative signpreceding the number e g. -45 or parentheses e g. (45).)Net IncomeMakeIncrease (Decrease)Buy$$Variable manufacturing costs$Fixed manufacturing costsPurchase price$$Total annual costthe part.The decision should be to3:02 PM)11/10/20hptAA

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Answered: Manson Industries incurs unit costs of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Manson Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 10,000 of the assembly part at $6 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Make Buy Net IncomeIncrease (Decrease) Variable manufacturing costs $enter a dollar amount $enter a dollar amount $enter the difference between the two previous amounts in the row Fixed manufacturing costs enter a dollar amount enter a dollar amount enter the difference between the two previous amounts in the row Purchase price enter a dollar amount enter a dollar amount enter the difference between the two previous amounts in the row Total annual cost…
Blossom Industries incurs unit costs of $7 ($4 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 10,900 of the assembly part at $5 per unit. If the offer is accepted, Blossom will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Blossom will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost The decision should be to eTextbook and Media +A Make ◆ the part. $ Buy LA $ Net Income Increase (Decrease)
Ivanhoe Industries incurs unit costs of $7 ($4 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 17,800 of the assembly part at $5 per unit. If the offer is accepted, Ivanhoe will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Ivanhoe will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost The decision should be to $ $ make Make the part. 43600 32700 i 76300 $ $ Buy i 32700 54500 87200 $ Net Income Increase (Decrease) 43600 i -54500 -10900 V A C Ac Q Ac
Kando Company incurs a $11.00 per unit cost for Product A, which it currently manufactures and sells for $18.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $4.00 per unit and sell it for $16.00 per unit. If it does so, unit sales would remain unchanged and $4.00 of the $11.00 per unit costs of Product A would be eliminated. 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.) Selling price per unit Cost per unit to make Cost per unit to buy Cost per unit not eliminated if bought Income per unit Company should: Make Buy
Keller Company sells product ZR101 for $25 per unit. The cost of one unit of ZR101 is $18. The estimated cost to complete a unit is $4, and the estimated cost to sell is $6. At what amount per unit should product ZR101 be reported, applying lower-of-cost-or-net realizable value?
Meg's Manufacturing Company can make 211 units of a component part for variable costs of $159,896 and fixed costs of $32,104. The compnay decides the buy the part externally instead for $153,734 and $4,789 of the fixed costs will be avoided. How much will net income increase or decrease? If net income increases, make your answer positive; If net income decreases, put a (-) negative sign in front of the answer. Round your answer to the nearest whole dollar and do not type the dollar sign.
Lockrite Security Company manufacturers home alarms. Currently, it is manufacturing one of its components at a total cost of $40, which includes fixed costs of $13 per unit. An outside provider of this component has offered to sell Lockrite the component for $29. Provide a differential analysis of the outside purchase proposal. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Make Component (Alternative 1) or Buy Component (Alternative 2) MakeComponent(Alternative 1) BuyComponent(Alternative 2) DifferentialEffects(Alternative 2) Unit costs: Purchase price Variable costs Fixed costs Total unit costs $
Muscat Inc. has been manufacturing its own Camera for its Mobile Phone. The company is currently operating at 100% of capacity. Variable manufacturing overhead cost is OMR 3 per unit. The direct materials and direct labor cost per unit to make the camera are OMR 4 and OMR 6, respectively, fixed cost is OMR 50,000. Normal production is 50,000 Mobile Phone per year.
If the company buys the part it will still have to pay $1.50 per unit for the fixed manufacturing overhead costs. Instructions: Evaluate the two options and recommend Dala Furniture Company whether it should make or buy the 25,000 units of part D.
Sheffield, Inc. is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $14. while the cost of assembling each unit is estimated at $16. Unassembled units can be sold for $54, while assembled units could be sold for $65 per unit. What decision should Sheffield make? O Process further; the company will save $11 per unit. O Process further; the company will save $5 per unit. Sell before assembly; the company will save $9 per unit. O Sell before assembly; the company will save $5 per unit.
M&S Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making a subassembly part for its finished product. A supplier offers to make 10,000 of the assembly part at $6 per unit. If the offer is accepted, M&S will save all variable costs but no fixed costs. 1. Prepare the incremental analysis for the decision to make or buy the products. 2. Should M&S Industries make or buy the products.
Tamarisk Manufacturing incurs unit costs of $7.20 ($5.20 variable and $2.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 17,200 of the parts for $5.70 per unit. If it accepts the offer, Tamarisk will save all variable costs and $1.00 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Tamarisk will realize by buying the part. (Round per unit answers to 2 decimal places, eg. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).)

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