State clearly whether the part should be made or bought

Assignment Help Accounting Basics
Reference no: EM132456586

Question - McMullen Co. uses 10,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $125,000 as follows.

Direct materials

$40,000

Direct labor

30,000

Variable manufacturing overhead

25,000

Fixed manufacturing overhead

30,000

Total costs

$125,000

An outside supplier has offered to provide Part X at a price of $10 per unit. If McMullen 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: EM132456586

Questions Cloud

What is the role of natural language processing in text mini : What is the role of natural language processing in text mining? Discuss the capabilities and limitations of NLP in the context of text mining.
How development can influence policy to solve a problems : How development can influence policy to solve a problems,Examples of societal problems are unemployment, pollution, water quality, safety
Prepare the company cash budget for November : The budgeted beginning cash balance is $36,000. Prepare the company's cash budget for November in good form
Write comment on the information on nursing homes : Write Comment on the information on Nursing Homes contained on the OSHA homepage.Ergonomics for the Prevention of Musculoskeletal Disorders"
State clearly whether the part should be made or bought : An outside supplier has offered to provide Part X at a price of $10 per unit. Please state clearly whether the part should be made or bought and share your work
Discuss the concept for musculoskeletal disorders : Evaluating a work task to identify potential risk factors that could lead to the development of a musculoskeletal disorder. concept for musculoskeletal disorder
How do you determine whether organization is ethical : What is the organization and how would you describe it? How do you determine whether an organization is ethical or not?
Discuss impact of current job design on worker efficiency : Discuss impact of current job design on worker efficiency, safety, and morale;recommendations for improving the job design using the hierarchy of controls
The use of fertility drugs and ovarian cancer : Stanford University medical researchers conducted a study on the correlation between the use of fertility drugs and ovarian cancer.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare a production budget for january and february

Prepare a production budget for January and February 2017

  What are the two methods of accounting for treasury stock

In January, 2018, Mordica repurchased 30,000 shares at $30 per share. What are the two methods of accounting for treasury stock

  Name the four areas in which standards of ethical conduct

name the four areas in which standards of ethical conduct exist for management accountants in the united states. what

  Recommendation on what to purchase to meet needs

Mary is a business student and is considering purchasing a new computer. She is looking for a recommendation on what to purchase to meet her needs.

  Importance of cash flow statement

This question relates to Accounting Basics and it's discussed about the importance of cash flow statement in addition to balance sheet and income statements. Apart from balance sheet and incomes statement, a cash flow statement is also used for ar..

  Competing companies from the same industry

Select two competing companies from the same industry (e.g., McDonalds vs. Burger King; Target vs. Walmart; etc.), calculate their financial ratios and measures (see below) based on their 2014 financial statements, and discuss from an investor's p..

  Compute the net present value of this investment opportunity

The company requires a 16% after-tax return on all equipment purchases. Compute the net present value of this investment opportunity

  Analyze conceptual framework with reference to annual report

Analyse the conceptual framework with reference to the annual reports of your chosen companies in light of the reporting requirements imposed on accountants.

  Determining the ending equity

Fast-Forward has beginning equity of $257,000, net income of $51,000, dividends of $40,000 and investments by owners in exchange for stock of $6,000. Its ending equity is:

  Compute the amount of gain

Ludwig, Inc., which owes Giffin Co. $1,600,000 in notes payable, is in financial difficulty. To eliminate the debt, Giffin agrees to accept from Ludwig land having a fair value of $1,220,000 and a recorded cost of $900,000.

  Compare the total of the schedule with the balance

Selected entries from the sales, cash receipts, and general journals for Healthy Nutrition are given in the Working Papers.

  Evaluate any damaging financial and ethical repercussions

Evaluate any damaging financial and ethical repercussions of failure to include the inventory write-downs in the financial statements.

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