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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 caseB Lose $0.20 per caseC Lose $0.80 per caseD Save $0.20 per case
Attainable Standards and Current Standards Although the standard must be set high sufficient that achievable and it has to be worked for. Attainable standards must provide a c
CVP applications
Quicksilver Compnay has set the follwoing standards for one unit of product: Direct material Quantity: 6.2 lbs per unit Price per lb: $11 per lb Direct Labor Quantity: 6 hrs
Why is it important for financial statements and other external reports to be based on generally accepted accounting principles?
Features of Effective Cost Center Framework During the establishing cost centers, an organization must consider the given points as: a) Clear definition about the cost cent
importance value index ivi
Place a prepared slide of Paratuecium under the microscope and focus it under low power (5x x 5x) and observe the following: i) It has a cigar-shaped or slipper-shaped body
Direct Materials Budget This budget implies the estimated quantities and costs of every the raw materials and components desired for the output demand by the production budget
Schedule of Work in Process The given schedule presents the calculations which pertain to work in the process. Pay attention to the details, noting that (1) direct materials
What is Labor Cost Control Management?
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