Reference no: EM133014520
Question - The South Company makes two products M1 and M2 with the budgeted details as follows:
M1 (in €) M2 (in €)
Production and sales for the year 10,000 12,500
Selling price 10.00 8.00
Cost per unit:
Direct materials 2.50 3.00
Direct labour 1.50 1.00
Variable production overhead 0.60 0.40
Fixed production overhead 1.20 1.00
Profit per unit 4.20 2.60
The fixed production overhead shown above comprises both general and specific fixed overhead costs.
The general fixed overheads cost has been attributed to units of M1 and M2 on the basis of direct labour cost. The specific fixed cost totals €2,500 per year and relates to product M2 only.
Both products are available from an external supplier.
Explain clearly your answers and show your detailed calculations.
1) If the South Company decided to purchase only M1, what should be the maximum price to be paid per unit of M1 instead of internal manufacture?
2) If the South Company decided to purchase only M2, what should be the maximum price to be paid per unit of M2 instead of internal manufacture?
3) If only product M1 was to be outsourced, what should be the number of units to be sold to achieve a profit of €50,000 per year?
How much will Stephen have in his retirement account
: If both Stephen and his employer continue to do this and he can earn a monthly rate of 0.75 percent, how much will Stephen have in his retirement account
|
What is the equivalent annual savings
: The opportunity cost of capital is 11%, and the firm's tax rate is 21%. What is the equivalent annual saving from the purchase
|
Prepare the journal entries to record overhead incurred
: The Beca Company uses a standard costing system. Prepare the journal entries to record overhead incurred
|
How much is the impairment loss recognized
: On January 1, 2020, Tigreal Bank granted a 10%, P3,000,000 loan to Kagura Company. How much is the impairment loss recognized
|
What should be the maximum price to be paid per unit
: If the South Company decided to purchase only M2, what should be the maximum price to be paid per unit of M2 instead of internal manufacture
|
What annual interest rate is Bill paying on his loan
: Bill borrowed RM100,000 today that he must repay in 10 annual end-of-year installments of RM14,902. What annual interest rate is Bill paying on his loan
|
How much will you have in the account
: Question - You deposit $ 8,878 in an account earning 5 % interest compounded monthly. How much will you have in the account in 16 years
|
Compute the production cost per unit under each plan
: The fixed overhead for 2017 should be $1,762,000. Compute the production cost per unit under each plan
|
What is musli weighted average cost of capital
: Musli has debt outstanding with a market value of RM2.2 billion. What is Musli's weighted average cost of capital
|