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Student Name 10 points Donald's Engine Company manufactures part TE456 used in several of its engine models Monthly production costs for 1000 units are as follows Direct materials

Student Name: (10 points) Donald's Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for 1,000 units are as follows: Direct materials $ 20,000 Direct labor 5,000 Variable overhead costs 15,000 Fixed overhead costs 10,000 Total costs $50,000 It is estimated that 10% of the fixed overhead costs assigned to TE456 will no longer be incurred if the company purchases TE456 from the outside supplier. Donald's Engine Company has the option of purchasing the part from an outside supplier at $42.50 per unit.

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Student Name: (10 points) Donald's Engine Company manufactures part TE456 used in several of its engine models. Monthly production costs for 1,000 units are as follows: Direct materials $ 20,000 Direct labor 5,000 Variable overhead costs 15,000 Fixed overhead costs 10,000 Total costs $50,000 It is estimated that 10% of the fixed overhead costs assigned to TE456 will no longer be incurred if the company purchases TE456 from the outside supplier. Donald's Engine Company has the option of purchasing the part from an outside supplier at $42.50 per unit. If Donald's Engine Company accepts the offer from the outside supplier, the monthly avoidable costs (costs that will no longer be incurred) total: If Donald's Engine Company purchases 1,000 TE456 parts from the outside supplier per month, then its monthly operating income will: The maximum price that Donald's Engine Company should be willing to pay the outside supplier is: (10 points) Willis Corporation manufactures industrial-sized gas furnaces and uses budgeted machine-hours to allocate variable manufacturing overhead. The following information pertains to the company's manufacturing overhead data: Budgeted output units 30,000 units Budgeted machine-hours 10,000 hours Budgeted variable manufacturing overhead costs for 15,000 units $322,500 Actual output units produced 44,000 units Actual machine-hours used 14,400 hours Actual variable manufacturing overhead costs $484,000 What is the budgeted variable overhead cost rate per output unit? (10 points) Meale Company makes a household appliance with model number X500. The goal for 2012 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of X500 units that can be produced. The industry market size for appliances increased 10% from 2011 to 2012. The following additional data are available for 2011 and 2012: 2011 2012 Units...

Jun 19 2020 View more View Less

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