Reference no: EM133044137
Question - Lijia Inc. (the company) manufactures appliances. One of their divisions manufactures a timer which are used in several of their appliances.
They produce 32,000 timers annually.
The cost per unit for the timer is as follows:
Description Cost
Direct materials 9.00
Direct labour 3.00
Variable overhead 2.25
Fixed overhead 5.25
Total cost 19.50
Of the total fixed overhead assigned to the timers, $64,000 is directly traceable to the production of the timer.
The remaining fixed overhead costs are common fixed overhead and therefore unavoidable.
An outside supplier has offered to sell the timers to Lijia Inc. for $16.50 per unit.
Required -
Analyze the above information and determine if the company should make or buy the timers.
If there was no other alternative use for the facilities that is currently used to produce the timers, should the company make or buy the timers?
What are the most that the company would be willing to pay an outside supplier for a one-timer?
If the company buys the timers, would their operating income increase, decrease, or stay the same?
If the company buys all of their timers, by how much would their operating income change?
If the company could rent out the space that is currently used to produce the timers for $22,000 per year, should the company make or buy the timers?
If the company buys the timers and then rents out the space that is currently used to produce the timers for $22,000 per year, by how much would their operating income change?
|
What is Acort equity cost of capital
: Acort Industries has 11 million shares outstanding and a current share price of $36 per share. What is Acort equity cost of capital
|
|
Compute the company days sales in inventory
: Refer to the following selected financial information from Fennie's, LLC. Compute the company days sales in inventory for Year 2
|
|
How do you calculate the self-employment tax
: He works a second job from which he receives FICA taxable earnings of $105,100. How do you calculate the self-employment tax
|
|
What the adjusted cash balance per the bank records
: Additionally, a $36 check written and recorded by the company correctly, What the adjusted cash balance per the bank records
|
|
Should the company make or buy the timers
: If the company could rent out the space that is currently used to produce the timers for $22,000 per year, should the company make or buy the timers
|
|
Determine the consolidated inventory at year-end
: For the current year, Parent and Subsidiary each report sales of P1,000,000 and P900,000 each, Determine the consolidated inventory at year-end
|
|
What is the impact of switching from FIFO
: During the year, Enchanted Forest purchased 300 units on January 15 for $16 per unit, What is the impact of switching from FIFO
|
|
Journalize the cost of transferred-in materials
: Journalize (1) the cost of transferred-in materials, (2) the conversion costs, and (3) the costs transferred out to Finished Goods
|
|
Privacy and security-protected health information
: The Privacy Rule aims to balance two interests in the handling of "protected health information" (PHI). What are those two interests?
|