Find how would profits be impacted if sam bought component

Assignment Help Managerial Accounting
Reference no: EM132720150

Sam's Manufacturing Company currently makes 100 units of a necessary component. Management is considering outsourcing this component for a cost of $1,700 per unit. Sam's incurs the following total production costs:

Direct Materials$80,000

Direct Labor23,000

Variable Overhead37,000

Fixed Overhead 24,000

Problem 1: If production is outsourced, none of the fixed overhead costs will be eliminated. How would profits be impacted if Sam's bought the component?

Option 1: Profits would go up by $67,000

Option 2: Profits would go down by $6,000

Option 3: Profits would go up by $6,000

Option 4: Profits would go down by $30,000

Reference no: EM132720150

Questions Cloud

What type of communication is most effective : To demonstrate how teams and effective communication are applied in the workplace that relate to how managers develop teams and/or communicate
Evaluate what year will income before tax be affected : Evaluate what year will income before tax be affected by discounts, assuming that all customers paid the net-of-discount amount on January 6, 2022? By how much?
Discuss any two managerial functions : Discuss any two managerial functions and why the performance of these functions are important for every organization.
What was meant by a southern identity : So far Daniel Chinn is really enjoying interacting with the "new idea people" as he refers to his new management hires. However, he worries that their newness
Find how would profits be impacted if sam bought component : Sam's Manufacturing Company currently makes 100 units of a necessary component. How would profits be impacted if Sam's bought the component?
Process management tools for an organization : Appraise three important process management tools for an organization.
Why are learning teams important : Why are learning teams important?
Explain the concept of unified command : Explain the concept of Unified Command, including an explanation of why it should be used in this incident over a single incident commander.
Briefly explain the ics principle of integrated : Briefly explain the ICS principle of integrated or interoperable communications and why it would be important to adhere to this principle for this situation.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Find how would operating income be affected

If a special sales order is accepted for 6,500 seats at a price of $325 per unit, and fixed costs remain unchanged, how would operating income be affected?

  How to calculate Recoverable amount

Corporate Accounting - Business Report Assignment. How to calculate Recoverable amount, Value in use, Fair value less cost of disposal

  How do compute the product margins for the xtreme

Estimated Overhead, How do Compute the product margins for the Xtreme and the Pathfinder products under the activity-based costing system.

  Provide analysis showing the total cost saving

Provide analysis showing the total cost saving, if any, Coronado will realize by buying the part. (Enter negative amounts using either a negative sign)

  What skills and knowledge do management accountants need

ACC8000 SUPPLEMENTARY ASSIGNMENT. Using at least ten research studies, answer the following the following questions: What are the various activities/roles that management accountants undertake? What skills and knowledge do management accountants need..

  Compute the company cost of goods sold

If VeriCo's cost of goods manufactured for 2019 amounted to $1,890,000, please determine the company's cost of goods sold for the 2019.

  What would be the total incremental profit under plan

What is your opinion, why company's revenues and costs differ across customer? What would be the total incremental profit under your plan?

  Find what unit cost would appear on job cost sheet for job

Suppose Job #232 contained 100 units. What unit cost would appear on the job cost sheet for job #232? Show ALL calculations.

  How to calculate the company activity variances for july

Calculate the company's activity variances for July. Flight Cafe Planning Budget For the Month Ended July 31 Budgeted meals (q) 25, 000 Revenue ($3. 80q) $95.

  Find the divisions investment amount was

Find the divisions investment amount was. Howard Company provided the selected information about its consumer products division

  Sales mix decisiondr massy who specializes in internal

sales mix decisiondr. massy who specializes in internal medicine wants to analyze his sales mix to find out how the

  Using the total cost method what price should galla charge

Using the total cost method what price should Galla charge?Galla Inc. needs to determine a price for a new product. Galla desires a 25% markup on the total cost

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