Solution-Find what would be the maximum price per unit

Find what would be the maximum price per unit

Assignment Help Managerial Accounting

Reference no: EM132527505

Platon currently manufactures a subcomponent that is used in its main product. A supplier has offered to supply all the subcomponents needed at a price of $42. Platon currently produces 100,000 subcomponents at the following manufacturing costs:

Direct materials: $15.00

Direct labor: 9.00

Variable manufacturing overhead 10.00

Fixed manufacturing overhead 15.00

Unit cost 49.00

Question a. If Platon has no alternative uses for the manufacturing capacity, what would be the profit impact of buying the subcomponents from the supplier?

Question b. If Platon has no alternative uses for the manufacturing capacity, what would be the maximum price per unit they would be willing to pay the supplier?

Question c. Now assume Platon would avoid $150,000 in equipment leases and salaries if the subcomponent were purchased from the supplier. Now what would be the profit impact of buying from the supplier?

Reference no: EM132527505

Questions Cloud

What is the net working capital turnover rate : Current assets are 94700, accounts payable is 36200, net income is 12400 and sales are 110800. What is the net working capital turnover rate?

Prepare the necessary journal entries related to the stock : Required - Prepare the necessary journal entries related to the stock option plan for the years ended December 31, 2017 through 2020

Explain the empirical approach to measure managerial : Explain the empirical approach to measure managerial overconfidence. Also, explain the underlying reasons/mechanisms why it works

Dividend date if the franking credits are fully valued : JFE Corporation has announced a fully franked dividend of $1 per share. The corporation tax rate is 30%. By how much should the share price fall

Find what would be the maximum price per unit : If Platon has no alternative uses for the manufacturing capacity, what would be the maximum price per unit they would be willing to pay the supplier?

Define IT organizational structure : Define the IT organizational structure and how the IT organizational structure impacts culture and change management practices.

What is the net impact on the long-term assets : What is the net impact on the long-term assets of Touch Tronix Company on its December 31, 2020 statement of financial position

Entrenchment index as a proxy for corporate governance : Explain why we can consider Entrenchment Index as a proxy for corporate governance.

What annual interest rate : At what annual interest rate must $137,000 be invested so that it will grow to be $475,000 in 14 years?

User Account

All Pages

Find what would be the maximum price per unit

Reference no: EM132527505

Reference no: EM132527505

Questions Cloud

Reviews

Write a Review

Managerial Accounting Questions & Answers

Manage budgets and financial plans

Prepare a retained earnings statement

Prepare a master budget for the three-month period

Construct the companys direct labor budget

Evaluate the predetermined overhead rate

Determine the company''s bid

Compute the pool rates for the different activities

Prepare Company financial statements

Prepare an analysis of terracycles

Discuss the ethical issues

Political resources in emerging markets

Management accounting - ehsan electronics company

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT