Prepare a make-or-buy analysis showing the annual advantage

Assignment Help Accounting Basics
Reference no: EM132055193

Question - Lindon Company uses 7,500 units of Part Y each year as a component in the assembly of one of its products. The company is presently producing Part Y internally at a total cost of $119,000 as follows.

Direct materials $26,000

Direct labor 28,000

Variable manufacturing overhead 20,000

Fixed manufacturing overhead 45,000

Total costs $119,000

An outside supplier has offered to provide Part Y at a price of $12 per unit. If Lindon stops producing the part internally, one third of the fixed manufacturing overhead would be eliminated.

Required: Prepare a make-or-buy analysis showing the annual advantage or disadvantage of accepting the outside supplier's offer. Please state clearly whether the part should be made or bought and share your work.

Reference no: EM132055193

Questions Cloud

Prepare the company cash budget for november : Prepare the company's cash budget for November in good form. Make sure to indicate what borrowing, if any, would be needed to attain desired ending cash balance
Provide an example of a real-world event involving a bombing : Provide an example of a real-world event involving a bombing, kidnapping, or terrorism act which occurred in the past 20 years.
How many phones must be sold to achieve the breakeven point : How many phones must be sold to achieve the breakeven point.
Prizes has the highest present value : If the interest rate is 10% per annum, compounded annually, which of the following prizes has the highest present value?
Prepare a make-or-buy analysis showing the annual advantage : Prepare a make-or-buy analysis showing the annual advantage or disadvantage of accepting the outside supplier's offer
Define police professionalism : With the ever-growing demands of an evolving country, police professionalism was implemented to adhere to the expectations of a civil society.
What is the value of stock today : What is the value of this stock today if the required return is 14%?
Explain two unintended consequences of the war on drugs : Explain two unintended consequences of the War on Drugs. Explain whether or not you believe society has benefited from the War on Drugs and why.
Identify the three findings and describe ways : Identify the three findings and describe ways that technology and social media have changed the roles of managers since Mintzberg's 1960 study.

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