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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
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First in First Out or FIFO FIFO method is based upon the assumption such stock purchased first is issued first. Prices of stock purchased first are employed to determine the v
standard hours = 5000 standard wages = Rs.3/hr actual hours worked = 5600 hrs actual wages paid = 17920
Group Bonus Plan There are specific operations or jobs that require to be done collectively via a group of workers, as an example of, continuous production work flows in asse
XYZ Co. manufactures automation machinery according to customer specifications. The company is relatively new and has grown each year. XYZ Co. operated at about 75% of practical
A retailer knows the annual demand for one of its product is 100,000 units, the ordering costs are £25 per order and the average carrying cost per unit is 35 pence. You are require
WORKED EXAMPLES OF EXPECTED CASH COLLECTIONS PATTERNS
Reserves and surplus or retained earnings usually occur out of profitable operations. This is a surplus not distributed through the firm as dividends. Conversely, these are profits
Limitations of Marginal Costing
Long-Term Liabilities: These are usually for more than one year. They cover almost all the outsider's liabilities not comprised in the current liabilities and provisions. Such
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