What is the financial advantage

Assignment Help Managerial Accounting
Reference no: EM132418606

Direct Materials $4.00

Direct Labor $8.00

Variable Manufacturing Overhead $2.00

Fixed Manufacturing Overhead $9.00

Total Cost Per Part $23.00

An outside supplier has offered to sell 36,000 units of part S-6 each year to Han Products for $19 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $86,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier.

Required:

What is the financial advantage (disadvantage) of accepting the outside supplier's offer?

Reference no: EM132418606

Questions Cloud

Compare formal institutions of Supreme Court and Presidency : Compare the formal institutions of the Supreme Court and the Presidency. What are two ways that each institution is republican in nature
Calculate the immediate settlement of the foundation : Determine the stresses at point A which is directly below point C and at the midpoint of the sand stratum and Calculate the immediate settlement
Define the concepts of intelligence versus information : Define (that is, "operationalize") the concepts of intelligence versus information. How might either be easier-or more difficult-to share with other agencies?
Accepting the special order from the wedding part : What is the financial advantage (disadvantage) of accepting the special order from the wedding part
What is the financial advantage : What is the financial advantage (disadvantage) of accepting the outside supplier's offer?
What is the equation for finding out payback period : What is the equation for finding out payback period as well as Net Present value?
Determine the dollar amount of ocean city kite : Ocean City Kite Company manufactures & sells kites for $7.50 each. The variable cost per kite is $2.50 with the current annual sales volume of 70,000 kites.
What is your understanding of jails : What is your understanding of jails, and why they are necessary? Justify your reasoning. Present some of the advantages and disadvantages of treatment programs.
Actual total direct labor cost-frontera company : What is the actual total direct labor cost for the current period? What is the actual total direct labor cost?

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Prepare a table that shows total cost of forming equipment

Prepare a table that shows the total cost of forming equipment rental and unit cost for units ranging from 0 to 50,000, using increments of 10,000 units.

  Allocating joint costs

Assign the joint land and improvement costs to the lots using the value basis of allocation and compute the average cost per lot in the Canyon section and in the Hilltop section.

  Reflect on whether or not budgets were effectively applied

Budgets play a critical role in management activities such as planning, controlling and motivating employees. Reflect on whether or not the budgets were effectively applied and whether your experience was positive or negative.

  Working capital management is a tool for business survival

Prepare a Research paper - Research topic is "Working capital management is a tool for business survival"

  Annual budget for rtwmtc

You've been appointed as an executive director of small nonprofit organization. Among your many duties are to estimate an annual budget and develop a fiscal plan for organization.

  The pulse rates for adult women were as follows

The pulse rates for 13 adult women were as follows. Construct a 0.98 confidence interval for the mean pulse rate.

  Describe the discretionary fiscal policies

shows that increased government purchases, with taxes held constant, can eliminate a recessionary gap. How could a tax cut achieve the same result - Describe the discretionary fiscal policies to close a recessionary gap and an expansionary gap

  Research and development expense

On its 2016 income statement, Abbott Laboratories reported research and development expense of $1,422,000,000.

  Explain why highlighting non-value-added costs is important

Prepare a report that presents value-added, non-value-added, and actual costs for purchasing. Explain why highlighting the non-value-added costs is important.

  Find cost per patient day using a functional-based approach

Calculate the cost per patient day using a functional-based approach. Calculate the cost per patient day using an activity-based approach.

  Compute the number of units of each product

Compute the number of units of each product that must be sold for Basu to break even.- Would Basu be better off with this strategy?

  Estimating opportunity cost

Assume that Dr. Behr has definitely decided to take every other Saturday off. She loves to repair her sports car by doing the work herself. If she works on her car during half a Saturday when she otherwise would nott see patients, what is her oppo..

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