At what production level would Y Company be indifferent

Assignment Help Managerial Accounting
Reference no: EM132744105

Question - Y Company currently makes 2,600 units of a unique part for one of its finished products. Variable production costs for this part are $13.46 per unit; fixed costs associated with this part are $10,000 per year.

A company has offered to supply Y Company with the part for a price of $16.00 per unit. For Y Company, the bad news is that it will have to inspect the parts upon arrival, requiring rental of a special machine for $3,500 per year and per-unit inspection costs of $3.40. The good news is that if it buys the part, not only can it avoid all of the fixed costs associated with the production of the part, but it can use the released production facilities to generate $14,000 per year.

At what production level would Y Company be indifferent between making the part and buying it?

Reference no: EM132744105

Questions Cloud

What are the roles and responsibilities under haccp : What are the roles and responsibilities under HACCP?
Implications for theory : Identify three "implications for theory" that apply to the documentary and explain each of them with a minimum of one paragraph.
Identify the ingredients of leadership process : Select your preferred leader and identify the ingredients of leadership process most suitable in the time of industrial crisis.
How to more effectively interact with the patients : In this scenario, you are administrators at a hospital that has seen an increase in the number of patients coming in for treatment that requires specific health
At what production level would Y Company be indifferent : Variable production costs for this part are $13.46 per unit; At what production level would Y Company be indifferent between making the part and buying it
What are the 7 principle in a haccp system : What are the 7 principle in a HACCP System? What are the roles and responsibilities under HACCP?
Calculate the average annual return for the portfolio : Question - Suppose you had held a portfolio consisting of 51.0% of Stock A and 49.0% of Stock B. Calculate the average annual return for the portfolio
Explain benefits a country could gain from free trade policy : Explain any three benefits a country could gain from ‘free trade' policy. Discuss any three reasons why countries choose to impose barriers to free trade with.
Motivate employees with feedback : Organization Management Can a supervisor motivate employees with feedback?

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd