Calculate the net benefit to the wheel division

Assignment Help Accounting Basics
Reference no: EM132037636

Question - Internal or External Acquisitions

The Van Division of MotoCar Corporation has offered to purchase 180,000 wheels from the Wheel Division for $41 per wheel. At a normal volume of 500,000 wheels per year, production costs per wheel for the Wheel Division are as follows:

Direct materials $15

Direct labor 11

Variable overhead 6

Fixed overhead 17

Total $49

The Wheel Division has been selling 500,000 wheels per year to outside buyers at $58 each. Capacity is 700,000 wheels per year. The Van Division has been buying wheels from outside suppliers at $56 per wheel.

(a) Calculate the net benefit (or cost) to the Wheel Division of accepting the offer from the Van Division.

(b) Calculate the net benefit (or cost) to Motocar Corp. if the Wheel Division accepts the offer from the Van Division.

Reference no: EM132037636

Questions Cloud

Compute the post retirement benefits expense : Accumulated post retirement benefit obligation at January 1, 2014-330,000. Compute the post retirement benefits expense for 2014
Describe the square planar molecular geometry : What hybridization is needed to describe the square planar molecular geometry of Krf4? Explain how the hybridization is done.
Cost efficiency in relation to the healthcare system - oman : The focus of the paper is all about cost efficiency and cost effectiveness in relation to the healthcare system here in Oman
What is the mole-fraction of co2 and o2 gases : A pressure vessel contains CO2 (PCO2 = 3.78 atm) and O2 (PO2 = 6 atm) gases at a total pressure of 9.78 atm. What is the mole-fraction of CO2 and O2 gases?
Calculate the net benefit to the wheel division : Question - Internal or External Acquisitions. Calculate the net benefit (or cost) to the Wheel Division of accepting the offer from the Van Division
Determine the relative error for the quantity : 1. Determine the % relative error for the following quantity: (5.47±0.05) + (0.47±0.03) - (0.87±0.02)
What should the new volume of the balloon be : A student increases the temperature of a 556 cm cubed balloon from 278 k to 232 k. Assuming constant pressure, what should the new volume of the balloon be?
Calculate the volume of h2 formed : Calculate the volume of H2 formed at 20celsius and 750 torr if 3.12 g of Al is treated with excess NaOH.
What was the original annual rate of return : Question - Nonannual compounding using a calculator, What was the original annual rate of return needed to reach Prof. ME's goal

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