User Account

All Pages

What is the dollar effect of purchasing

Assignment Help Accounting Basics
Reference no: EM131697655

Question: Make or Buy, Qualitative Considerations Hetrick Dentistry Services operates in a large metropolitan area. Currently, Hetrick has its own dental laboratory to produce porcelain and gold crowns. The unit costs to produce the crowns are as follows:

722_28.png

Fixed overhead is detailed as follows:

Salary (supervisor)            $26,000

Depreciation                        5,000

Rent (lab facility)                32,000

Overhead is applied on the basis of direct labor hours. These rates were computed by using 5,500 direct labor hours. A local dental laboratory has offered to supply Hetrick all the crowns it needs. Its price is $125 for porcelain crowns and $150 for gold crowns; however, the offer is conditional on supplying both types of crowns-it will not supply just one type for the price indicated. If the offer is accepted, the equipment used by Hetrick's laboratory would be scrapped (it is old and has no market value), and the lab facility would be closed. Hetrick uses 2,000 porcelain crowns and 600 gold crowns per year.

Required: 1. Conceptual Connection: Should Hetrick continue to make its own crowns, or should they be purchased from the external supplier? What is the dollar effect of purchasing?

2. Conceptual Connection: What qualitative factors should Hetrick consider in making this decision?

3. Conceptual Connection: Suppose that the lab facility is owned rather than rented and that the $32,000 is depreciation rather than rent. What effect does this have on the analysis in Requirement 1?

4. Conceptual Connection: Refer to the original data. Assume that the volume of crowns used is 3,400 porcelain and 600 gold. Should Hetrick make or buy the crowns? Explain the outcome.

Reference no: EM131697655

Questions Cloud

Any additional change occurs in respiratory system : Any additional change occurs in integumentary system? Any additional change occurs in respiratory system?
Calculate anyas social security and medicare taxes : Calculate Anya's Social Security and Medicare taxes. Calculate how much of the taxes are deductible. What credit might Goulds use to reduce their tax liability?
What qualitative factors might impact the decision : What qualitative factors might impact the decision? Assume that no other orders are expected beyond the regular business and the special order.
Understand specific current biological events : The ability to understand evolution is important in being able to understand specific current biological events.
What is the dollar effect of purchasing : Conceptual Connection: Should Hetrick continue to make its own crowns, or should they be purchased from the external supplier?
What is the difference between the myd88-dependent : What is the difference between the MyD88-dependent and MyD88-independent pathway of TLRs signaling?
What will be difference in profits if depryl is processed : If Zanda normally sells 265,000 pounds of depryl per year, what will be the difference in profits if depryl is processed further?
Expressed only in the homozygote : Many deleterious genes are recessive and therefore are expressed only in the homozygote. Many of them are also utterly lethal.
What is karous income tax savings over the life of the loan : What is Karou's income tax savings over the life of the loan if she chooses to use her home equity line of credit to finance the purchase of her new car?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Purpose of generally accepted accounting principles

What is the purpose of generally accepted accounting principles (GAAP) and the accounting cycle? Is it possible to deviate from GAAP and the accounting cycle and still prepare financial statements? Why? What are some possible consequences of this ..

  False value hardware began 2013 with a credit balance of

false value hardware began 2013 with a credit balance of 31200 in the allowance for sales returns account. sales and

  The auto repair shop uses standards to control labor time

the auto repair shop uses standards to control labor time and labor cost in the shop. the standard time for a motor

  Tim duggan owns and manages sky restaurant a 24-hour

tim duggan owns and manages sky restaurant a 24-hour restaurant near the citys medical complex. tim employs 9 full-time

  Delta mowers has a debt-equity ratio of 12 its wacc is 101

delta mowers has a debt-equity ratio of 1.2. its wacc is 10.1 percent and its cost of debt is 7.5 percent. there is no

  Dawn a single cash method taxpayer paid the following in

dawn a single cash method taxpayer paid the following in the current year item amount federal income tax employer

  Gross profit on uncompleted contract

On July 1, 2014, Welton Inc. entered into a costplus-fixed-fee contract to construct a prototype robotic assembly line for New Car Corporation.

  Identify the accounts that are added to or deducted

Identify the accounts that are added to or deducted from Purchases to determine the cost of goods purchased. For each account, indicate whether it is added or deducted.

  Describe the common cost drivers that could be used

If you have utilized an activity-based costing system in your former or current employment, describe how this system had been used. In your response, be sure to include your experience and position on the effectiveness of the activity-based costin..

  If the employee has 300 withheld from their check for

1. if the employee has 300 withheld from their check for fica-oasdi what is the added amount that the employer would

  What is the initial cost of the silver mine

The company's credit-adjusted, risk-free rate of interest is 6%. What is the initial cost of the silver mine?

  Prepare the general journal entries

Question - Marin Co. purchased a equipment on January 1, 2015, for $588,500. Prepare the general journal entries that should be made at December 31, 2018

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd