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Question 1) Baker Corp. manufactures a high-tech recliner for weary professors after accounting classes. The motor housing unit costs for 17,500 units:
direct material 105
direct labor 70
variable overhead 50 (10% is avoidable)
fixed overhead 60 (95% is a corporate allocation of common costs)
A Far East firm has offered to supply the part for $200
Question a) should the firm accept the outside offer?
Question b) Assume the firm could rent out the manufacturing space used to assemble this part for a yearly rental of $120,000. Does this rental opportunity change the decision? Show all calculations.
How would your error affect breakeven sales and operating income under the proposed sales commission plan? What could Barnhill have done differently?
Similarities between manufacturing, non-manufacturing, serviced based businesses and not for profit organizations are.
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From the following list identify which activities are concerned mainly with cost and management accounting and which are concerned with financial accounting.
Accounting for manufacturing overhead. Consider the following selected cost data for the Pittsburgh Forging Company for 2008. Budgeted manufacturing overhead costs $7,500,000
Price is $20 per unit. At current sales volume, unit cost (total cost per unit) is $15. Question: How much will the profit change if we sell one additional unit
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