How much will alan save or lose, Cost Accounting

Assignment Help:

 Hale Company makes sets of wrenches. They are trying to decide whether to continue to make the case the wrenches are sold in, or to outsource it to another company. The direct material and direct labor cost to produce the cases total $2.00 per case. The overhead cost is $1.00 per case which consists of $0.40 in variable overhead which would all be eliminated if the case were bought from the outside supplier. The $0.60 of fixed overhead is based on expected production of 200,000 cases per year and consists of the salary of the case production manager of $40,000 per year and $80,000 in depreciation on equipment that would have no resale value. The manager would be laid off if the cases were bought externally. Additionally, if the case production were stopped, the space that it is using could be rented out for $20,000 per year. The outside supplier has offered to supply the cases for $2.80 per case. How much will Alan save or lose if the cases are bought externally?
A Save $0.40 per case
B Lose $0.20 per case
C Lose $0.80 per case
D Save $0.20 per case


Related Discussions:- How much will alan save or lose

Overhead anaylysis, the annual overhead costs for abc ltd which has 3 produ...

the annual overhead costs for abc ltd which has 3 production centeres and 2 service centers are as follows. indirect wages & supervision X 2million Y 2million 3 production departme

Why is it important for financial statements, Why is it important for finan...

Why is it important for financial statements and other external reports to be based on generally accepted accounting principles?

Features and procedures of job costing, Features and Procedures of Job cost...

Features and Procedures of Job costing Features of Job costing Product is against the customer's order and not on job stocks. Every job has its own characteristics and ne

debt service fund and special revenue fund, For your assignment, discuss w...

For your assignment, discuss when the government and nonprofit organizations would use each of the following funds: Capital projects fund Debt service fund Special r

Cost benefit approach - terms used in cost accounting, Cost Benefit Approac...

Cost Benefit Approach - Terms Used in Cost Accounting Is the primary criterion for selecting with alternative accounting approaches? There is a direct relationship in a co

Prepare a preliminary cost benefit analysis, Managers need financial inform...

Managers need financial information to help them make decisions, communicate important information about their organization, and demonstrate fiscal responsibility to stakeholders.

Find the high future rates of return, Assume your grandparents have just gi...

Assume your grandparents have just given you $20,000 on the condition that you invest the money in the stock market. As you contemplate making your investment choices, what accoun

Calculate the current cost capital, The Zooline Company (Pty) Ltd is an Ame...

The Zooline Company (Pty) Ltd is an American based company that focuses on the LSM 8 -10 markets. They do vehicle interiors, raise or lower suspensions and install top end sound sy

Write Your Message!

Captcha
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