At what production level would y company be indifferent

Assignment Help Accounting Basics
Reference no: EM132783979

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 $12.64 per unit; fixed costs associated with this part are $11,000 per year.

A company has offered to supply Y Company with the part for a price of $15.40 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 $3,700 per year and per-unit inspection costs of $3.50. 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 $13,000 per year.

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

Reference no: EM132783979

Questions Cloud

Evaluate the degrees of success achieved by doctors : The story of mankind's attempts to understand illness, both mental and physical, has often followed a long and torturous path, filled with small successes.
Prepare journal entries that uncle scrooge company should : Donald Duck unexpectedly paid his account in full. On the Bad Debt working paper, prepare the journal entries that Uncle Scrooge Company should
What role did georges cuvier play in their scientific lives : Who were Buffon and Fourier and what contributions did they make to advance science in the 18th century? What role did Georges Cuvier play in their scientific.
Which journal entry to purchase merchandise : To include the personal assets and transactions of a business's owner in the records and reports of the business would be a violation of the
At what production level would y company be indifferent : Variable production costs for this part are $12.64 per unit; At what production level would Y Company be indifferent between making the part and buying it
Organization level strategy and business level strategy : What is the difference between an organization level strategy and a business level strategy? Why are each of these important for an organization?
What is gross margin : The figures are provided for Hanauma Marketing Corp. What is gross margin? Which approaches for bad debts is best described as a balance sheet method?
Discuss porter five forces : Discuss Porter's Five Forces and why each is relevant to an organization.
Write an essay about lowering the budget of prisons : 2000 word essay about Lowering the budget of Prisons. How it affects the economy. Why the topic matters to you and/or your perceived audience.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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