Why should eastside buy the component

Assignment Help Accounting Basics
Reference no: EM131908943

Problem

Make or Buy Eastside company incurs a total cost of $120,000 in producing 10,000 units of a component needed in the assembly of its major product. The component can be purchased from an outside supplier $11 per unit. A related cost study indicates that the total cost of the component fixed costs equal to 50% of the variable costs involved.

a. Should Eastside buy the component if it cannot otherwise use the released capacity? Present your answer in the form of differential analysis.

b. What would be your answer to requirement (a) if the released capacity could be used in a project that would generate $50,000 of contribution margin?

Reference no: EM131908943

Questions Cloud

War on poverty and subsequent federal programs : Article: The War on Poverty and Subsequent Federal Programs: What Worked, What Didn't Work, and Why? Lessons from Future Programs
How will you retain the tacit as well as the explicit talent : In creating a new mobile app for university students answer the following questions. (Beyond quotations, your own words are preferred.)
Balances supply and demand : What would be reasons a worker's wages might be above the level that balances supply and demand?
Function related to marginal product of labor : How does AT&T's production function related to its marginal product of labor? How is AT&T's marginal product of labor related to the value of its marginal
Why should eastside buy the component : Should Eastside buy the component if it cannot otherwise use the released capacity? Present your answer in the form of differential analysis.
What should the standing order quantity be for steak : The Kirei-Hana Japanese Steak House in San Francisco consumes 3,000 pounds of sirloin steak per month. Yama Hirai, the new restaurant manager.
Discuss the process manufacturing settings : Lean principles have been popular in manufacturing especially of which products are discrete. Do you think lean principles are also applicable in process.
Find the price to yield convertible semi-annually : A 20-year, $4000 par value bond has 8% semiannual coupons and matures at par. Find the price to yield 6% convertible semi-annually.
Project the annual free cash flows of producing the chains : Project the annual free cash flows (FCF) of buying the chains. Compute the initial FCF of producing the chains.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Maximum amount the company should be willing to pay

What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying

  Gaillard computes its overhead rates using practical volume

at the beginning of the year gaillard company had the following standard cost sheet for one of its chemical products

  Oran refiners inc processes sugar cane that it purchases

oran refiners inc. processes sugar cane that it purchases from farmers. sugar cane is processed in batches. a batch of

  Williamson corporation acquired two inventory items at a

williamson corporation acquired two inventory items at a lump-sum cost of 40000. the acquisition included 3000 units of

  Discuss the efficient market hypothesis

Discuss the efficient market hypothesis. Explain why financial statement analysis can or cannot be performed in a way that provides significant advantage to an investor.

  How much gross income from the dividend does delta report

Delta corporation owns 2% of the stock in a U.S. corporation Azul. How much gross income from the dividend does Delta report

  Explain lockout provisions and yield-maintenance agreements

Explain lockout provisions and yield-maintenance agreements. Does the inclusion of one or both of these provisions affect the borrower's cost of debt financing? Explain.

  What is the amt income for mark

Mark is a single taxpayer who has a regular tax liability of $41,500 for the current year. Mark has no itemized deductions he claims the standard deduction.

  Murphy mining company recently purchased a quartz mine

Murphy Mining Company recently purchased a quartz mine that it intends to work for the next 10 years. According to state environmental laws, Murphy must restore the mine site to its original natural prairie state after it ceases mining operatio..

  Summarize the variances that you computed in 1 above by

portland companys ironton plant produces precast ingots for industrial use. carlos santiago who was recently appointed

  What is the adjustment to record the accrued fees

What is the adjustment to record the accrued fees? Indicate each account affected, whether the account is increased or decreased

  Prepare the entry on wildhorse co books

On May 10, Wildhorse Co. sold merchandise for $25,000 and accepted the customer's Best Business Bank MasterCard.

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