What are the relevant costs for the make alternative

Assignment Help Financial Accounting

Reference no: EM131206470

The CJP Company produces 11,800 units of item S10 annually at a total cost of $244,000.

Direct materials $ 29,000

Direct labor 73,000

Variable overhead 54,000

Fixed overhead 88,000 Total $ 244,000

The XYZ Company has offered to supply 11,800 units of S10 per year for $27.00 per unit. If CJP accepts the offer, $13.00 per unit of the fixed overhead would be saved. In addition, some of CJP's facilities could be rented to a third party for $24,000 per year. What are the relevant costs for the "make" alternative?

$333,400.

$343,400.

$309,400.

$314,400.

Reference no: EM131206470

Questions Cloud

What is expected return for a portfolio with an investment : Weighing the probabilities with returns or risk, help to indicate which asset will be creating the most influence in a mix of assets or a portfolio. Consider the following information: What is the expected return for a portfolio with an investment of..

Explain the meaning of diversification : What is the goal of investors putting together a portfolio of investments? Using the music store as you example, what types of music would you put together, if you were an individual's portfolio manager, to satisfy a "risk-taking" preference? Explain..

Reaction to announcements of massive layoffs : In recent years, it has been common for companies to experience significant stock price changes in reaction to announcements of massive layoffs. Critics charge that such events encourage companies to fire longtime employees and that Wall Street is ch..

Determine the margin of safety : What dollar amount of sales would be necessary to achieve a profit of $150,000? how many units would be necessary to achieve the $150,000 profit? using the $150,000 profit, calculate/determine the margin of safety.

What are the relevant costs for the make alternative : The XYZ Company has offered to supply 11,800 units of S10 per year for $27.00 per unit. If CJP accepts the offer, $13.00 per unit of the fixed overhead would be saved. In addition, some of CJP's facilities could be rented to a third party for $24,000..

What is estimated raw materials inventory balance at the end : Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations: What is the estimated raw materials inventory balance at the end of July? What is the total estim..

The interest received and the fair value adjustment : Hendricks Corporation purchased trading investment bonds for $59,930 at par. At December 31, Hendricks received annual interest of $2,660, and the fair value of the bonds was $57,000. Prepare Hendricks’ journal entries for (a) the purchase of the inv..

Prepare the journal entry at the date of the bond purchase : On January 1, 2013, Dagwood Company purchased at par 11% bonds having a maturity value of $304,200. They are dated January 1, 2013, and mature January 1, 2018, with interest receivable December 31 of each year. The bonds are classified in the held-to..

Receipt of semiannual interest and premium amortization : Carow Corporation purchased, as a held-to-maturity investment, $77,900 of the 10%, 6-year bonds of Harrison, Inc. for $85,211, which provides a 8% return. The bonds pay interest semiannually. Prepare Carow’s journal entries for (a) the purchase of th..

User Account

All Pages