Compute the net dollar advantage or disadvantage

Assignment Help Managerial Accounting
Reference no: EM133144626

Question - Royal Company manufactures 10,000 units of Part R-3 each year. At this level of activity, the cost per unit for Part R-3 follows:

Direct materials $14.40

Direct labour 21.00

Variable manufacturing overhead 9.60

Fixed manufacturing overhead 25.00

Total cost: per part $70.00

An outside supplier has offered to sell 10,000 units of Part R-3 each year to Royal Company for $54 per part. If Royal Company accepts this offer, the facilities now being used to manufacture Part R-3 could be rented to another company at an annual rental of $150,000. However, Royal Company has determined that $15 of the fixed manufacturing overhead being applied to Part R-3 would continue even if the part was purchased from the outside supplier. Compute the net dollar advantage or disadvantage of accepting the outside supplier's offer.

Reference no: EM133144626

Questions Cloud

Evaluate the cio valuation approach : The CIO is proposing to measure the fair value of the automobiles at December 31, 2021, at $15,000, Evaluate the CIO valuation approach
Barriers and facilitators that influence team performance : What recommendations would you make for your team to improve its performance and What are the barriers and facilitators that influence team performance
Situation analysis between best buy-amazon : I need a situation analysis between Best Buy, Amazon, Walmart, and eBay answering the following three bulletins:
How does the innovation of technology contribute : How does the innovation of technology contribute to cultural change (1 paragraph)
Compute the net dollar advantage or disadvantage : Royal Company has determined that $15 of the fixed manufacturing overhead being applied. Compute the net dollar advantage or disadvantage of accepting the offer
Criteria that determines if negotiation was successful : What are the three criteria that determines if negotiation was successful?
Vital role in shaping public discussion : 1. Discuss how economics plays a vital role in shaping public discussion in the following policy areas:
Negotiations and planning for successful international : Q 1: Congratulations! You've been employed as the new project lead at Gamma Imports. Your first occupation is to figure out which estimating procedure; skimming
Idea that increased efficiency actually results : A friend to a member of your business group, named Jason, argues that increased efficiency in the use of resources would not lead to less consumption of your pr

Reviews

Write a Review

Managerial Accounting Questions & Answers

  What should be his maximum CPP contribution

Charles is 65 years of age and in receipt of a CPP retirement pension. He filed a CPT30 election. What should be his maximum CPP contribution

  Determine the break-even point in sales units

The variable cost is $73 per unit, while fixed costs are $448,592. Determine (a) the break-even point in sales units

  What is the net impact o blck lio company

What is the net impact o Blck Lio Company's Year 1 net income s  result of this hedge of  forested foreign currency purchase?

  What is the company contribution margin ratio

The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month. What is the company contribution margin ratio

  What the amount of inventory that would be reported

If 2,000 units remain unsold at the end of the month, what the amount of inventory that would be reported on the absorption costing balance sheet

  Calculate the weighted average unit contribution margin

Calculate the weighted average unit contribution margin, assuming a constant sales mix. Compute the break-even point in units for each product.

  Make Quisha a projected balance sheet

Make Quisha a projected balance sheet for 2021. Specific accounts are not necessary, but label expenses as variable or fixed

  What is the net proceed of the stock issue

If floatation cost of the stock issuance is 10%, what's the net proceed of the stock issue? MACS plans to issue common stock to the public at $80.

  Determine the sales mix as a function of units sold

The company's total fixed costs to produce the filtration systems are $203,535. Determine the sales mix as a function of units sold for the three products

  Determine equivalent units of production for victory company

Determine the equivalent units of production with respect to direct materials and conversion. Victory Company uses weighted-average process costing to account

  What is the unit cost below which forever ready company

What is the unit cost below which Forever Ready Company should not go in bidding on the government contract? Accepting Business at a Special Price

  How many units need to produce during the first quarter

How many units need to produce during the first quarter of the year? Joxy company is considering its forthcoming projections for budget purposes.

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