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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
Regression Analysis Method of Cost Estimation It includes estimating the cost function by utilizing past data or the dependent and the independent variables. Hence the cost fu
Introduction of Internal Rate of Return The traditional internal rate of return (IRR) method of project selection has been shown to be inferior to the NPV method due to vario
actual cost
31. Special Orders Maria’s Food Service provides meals that nonprofi t organizations distribute to handicapped and elderly people. Here is her forecasted income statement for April
Campground Inc. is considering the production and sale of propane lamps. Annual fixed costs associated with the project are expected to total $60,000. In addition, each lamp would
how does idle capacity effect cost behavior patterns and factory overhead application methods
A product is manufactured by passing through three processes: A, B and C. In process C a by-product is also produced which is then transferred to process D where it is completed. F
sir i want to know the whole procress of costing
10) Mike Taylor, the owner of Tennessee River Boat Rentals, is estimating the cost of operating his boat rental company next year. He expects to have 450 rentals during 200Z. The f
Superior Door Company sells pre-hung doors to home builders. The doors are sold for $60 each. Variable costs are $42 per door and fixed costs total $450,000 per year. The company i
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