How much do external failure com change

Assignment Help Cost Accounting
Reference no: EM132633715

Mitch Products has a budget of $910,000 in 2020 for prevention costs. If it decides to automate a portion of its prevention activities, it will save $80,800 in variable costs The new method will require $40,500 in training costs and $103,000 in annual equipment costs. Management is willing to adjust the budget for an amount up to the cost of the new equipment. The budgeted production level is 151,000 units.

Appraisal costs for the year are budgeted at $606,000. The new prevention procedures will save appraisal costs of $50,400. Internal failure costs average 515 per failed unit of ?nished goods. The internal failure rate is expected to be 2% of all completed items. The proposed changes will cut the internal failure rate by one-third. Internal failure units are destroyed. External failure costs average $50 per failed unit. The company's average external failures average 2% of units sold. The new proposal will reduce this rate by 50%. Assume all units produced are sold and there are no ending inventories.

Problem 1: How much do external failure com change if all changes are as anticipated with the new prevention procedures?

a. $151,000 increase

b. $30,200 decrease

c. $151,000 decrease

d None ofthe answers.

e. $75,500 decrease

Reference no: EM132633715

Questions Cloud

Determine the labor turnover based on the methods : Assume that there is no other information as to the changes in employees, determine the labor turnover based on the methods
Develop organisation development plan : Develop organisation development plan - What issues are we seeking to address in our community and What services and products do we provide to respond to these
Usefulness in an analysis of science fiction : Outline cultural/linguistic relativism and explain its usefulness in an analysis of Science Fiction.
What is inclusive education in a classroom setting : What is Inclusive Education in a classroom setting. Please provide at least 2-3 examples.
How much do external failure com change : Mitch Products has a budget of $910,000, How much do external failure com change if all changes are as anticipated with the new prevention procedure
How to build the body for paper for research : How to cite in APA citation? How to build the body for paper for research? How to build a bibliography?
How to find transitional wording : How to find transitional wording? When and how to use when writing an essay?
Determine absorption costing net operating income last year : Pasta Corp. manufactures a variety of products. Determine the absorption costing net operating income last year. Fixed manufacturing overhead cost per unit 2
Design of an OOP system using Data Structures : ASSESSMENT DESCRIPTION: This assessment is an individual report about the design of an OOP system using Data Structures and Algorithms

Reviews

Write a Review

Cost Accounting Questions & Answers

  What amount of manufacturing overhead was allocated

What amount of manufacturing overhead was allocated to all jobs during June 2010? What actual amount of manufacturing overhead costs was incurred

  Prepare a statement of changes in equity for simpsons ltd

Corporate Accounting (BBAC401) - Prepare a statement of profit or loss and other comprehensive income for Simpsons Ltd for the year ended 30 June 2018, according to the requirements of AASB 101 (classify expenses by function).

  What flexible budget showing profit capacity utilization

If it is decided to work the factory at 50% capacity, What flexible budget showing profit/losses at 40%, 50% and 90% capacity utilization?

  Image is everything inc iie is located in an emerging

image is everything inc. iie is located in an emerging market. it specializes in lithographic duplication catering to

  Calculate the amount of any over or under absorption

Calculate the amount of any over or under absorption of fixed overheads in april. Calculate the overhead absorption rate per hour.

  Should nevada implement the new method

1. Nevada's engineers have found a way to reduce equipment manufacturing time. The new method would cost an additional $60 per unit and would allow Nevada to manufacture 20 additional units a year. Should Nevada implement the new method? Show your ca..

  Determine the minimum price per unit

Determine the minimum price per unit the company should accept

  Accountant of the company does not agree with the same

The management desires to avail the exemption or relaxations available for SMCs in 2014-15. However, the accountant of the company does not agree with the same

  What would be the red margin in action analysis report

For the purposes of preparing action analyses, management has assigned ease of adjustment codes to the costs as follows: wages are classified as a Yellow cost; supplies and raw ingredients as a Green cost; and other expenses as a Red cost.

  How much was manufacturing overhead

Equivalent units for conversion costs for the month in the first processing department - cost per equivalent unit for materials for the month in the first processing department is closest to

  Define at what transfer price would the overall gain or loss

At what transfer price would the overall gain or loss to the company calculated in part 1 above, be equally shared by the two divisions

  Amazing glory inc knew a net income of 95000 including

amazing glory inc. knew a net income of 95000 including 20500 in depreciation expense. additional changes from balance

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