Innova uses 1,056 units of the component IMC2 every month to, Managerial Accounting

Innova uses 1,056 units of the component IMC2 every month to, Managerial Accounting

Assignment Help:

Innova uses 1,056 units of the component IMC2 every month to manufacture one of its products. The unit costs incurred to manufacture the component are as follows.

Direct materials $65.00
Direct labor 42.00
Overhead 126.50
Total $233.50

Overhead costs include variable material handling costs of $6.90, which are applied to products on the basis of direct material costs. The remainder of the overhead costs are applied on the basis of direct labor dollars and consist of 60% variable costs and 40% fixed costs.
A vendor has offered to supply the IMC2 component at a price of $274.00 per unit.

Prepare the incremental analysis for the decision to make or buy IMC2

Make IMC2 Buy IMC2 Net Income
Increase (Decrease)
Direct material $ $ $
Direct labor
Material handling
Variable overhead
Purchase price
Total unit cost $ $ $

Should Innova purchase the component from the outside vendor if Innova’s capacity remains idle?

Related Discussions:- Innova uses 1,056 units of the component IMC2 every month to

Assigning costs and assets , Assigning Costs and Assets After identify...

Assigning Costs and Assets After identifying its value chain, a firm must assign operating activity and assets to value activities. Operating costs must be assigned to the act

What is programmer budgeting, What is Programmer budgeting It is a comb...

What is Programmer budgeting It is a combination of programming and systems refers to the activity and system analysis refers to cost benefit analysis or operations research. I

Describe budgetary control according to brown and howard, Budgetary Control...

Budgetary Control According to brown and Howard According to brown and Howard," budgetary control is a system of controlling costs which includes the preparation of budget coor

Q, Granger products had the following transactions for the just completed m...

Granger products had the following transactions for the just completed month. The company had no beginning inventories. a)$75,000 in raw materials were purchased for cash. b) $7

Determine a firms earnings per share, You have been asked to determine the ...

You have been asked to determine the EPS indifference EBIT* level for your firm using the following information. Under the high-leverage alternative (a D/E ratio of 1.50), the firm

What is behind the wave of mergers in the banking industry, What is behind ...

What is behind the wave of mergers in the banking industry? A: Several economic factors have caused banking institutions to merge over the past several years. These factors inc

What procedure are followed in kaizen costing, What Procedure are followed ...

What Procedure are followed in kaizen costing In brief kaizen costing involves setting a new cost reduction target every month. The difference between the target profits and th

Classification of costs, discuss which of the cost classification is suitab...

discuss which of the cost classification is suitable for LunchBreak LTD and why?

Management accounting field, INTRODUCTION AND RATIONALE The purpose of...

INTRODUCTION AND RATIONALE The purpose of this assignment is to help students further develop a number of the skills and knowledge required and valued by the accountancy profe

What is fixed budget, What is Fixed budget The fixed budget is prepare...

What is Fixed budget The fixed budget is prepared for a given level of activity the budget is prepared before the beginning of the financial year. If the financial year starts

Write Your Message!

Name

Email id

Message

Verfication Code

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!

Submit Assignment

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd