Crowdly

make the part, as this would save $14 per unit

Company X produces a part that is used in the manufacture of one of its

products. The costs associated with the production of 15495 units of this

part are as follows:

Direct materials	$85000
Direct labor	125000
Variable factory overhead	60000
Fixed factory overhead	135000
Total costs	$405000

Of the fixed factory overhead costs, $69040

is avoidable. Company Y has offered to sell 15495 units of the same

part to Company X for $36 per unit.

Assuming there is no other use for the

facilities, Company X should (round the final answer to the nearest unit):

✅

buy the part, as this would save the company $339040

buy the part, as this would save $10 per unit

make the part, as this would save $10 per unit

Company X ends the month with two jobs still in progress. Job 5 has $10000 of materials,

$2000 of direct labor and $4964 of manufacturing overhead allocated. Job 6

was $30000 of materials, $2000 of direct labor and $10000 of manufacturing

overhead allocated. The cost of goods sold for the month was $40000 and of that

30% was overhead. There were no finished goods in stock as the month ends. If

the manufacturing overhead is underallocated by $10000, which of the following

choices would be the correct way to prorate it, assuming the proration is based

on the allocated overhead in the ending balances of work-in-process, finished

goods, and cost of goods sold?

Job 6 should be allocated another $1841 of cost

Job 5 should be allocated another $3709 of cost

Cost of goods sold should be increased by $4450

✅

Cost of goods sold should be increased by $10000

19027 units of Product A and 9514 units of Product B

Company X sells only two products, Product A and Product B.

	Product A	Product B	Total
Selling price	$50	$20
Variable cost per unit	$17	$6
Total fixed costs			$2193273

Company X sells two units of Product

A for each unit it sells of Product B. Company X faces a tax rate of 30% and desires a net after-tax income of $63000. The number of units that Company X must

sell to achieve its net income objective would be (round to the nearest unit):

54832 units of Product A and 27416 units of product B

32387 units of Product A and 16193 units of Product B

57082 units of Product A and 28541 units of Product B

For 2020, Company X uses machine-hours as the only overhead cost-allocation base. The

direct cost rate is $3 per unit. The selling price of the product is $18. The

estimated manufacturing overhead costs are $240000 and estimated 42500 machine

hours. The actual manufacturing overhead costs are $396319 and actual

machine hours are 50000.

Using job costing, the 2020 actual indirect-cost

rate is:

Company X's president has heard that there are multiple

breakeven points for every product. He does not believe this and has asked you

to provide the evidence of such a possibility. Some information about the

company for 2020 is as follows:

Total fixed manufacturing overhead	$183000
Total other fixed expenses	$202000
Total variable manufacturing expenses	$260000
Total other variable expenses	$290000
Units produced	70000	units
Budgeted production	70000	units
Units sold	50000	units
Selling price	$28

What are breakeven sales in units

using variable costing? (Round to the nearest unit)

Company X operates

on a contribution margin of 20% and currently has fixed costs of $510000.

Next year, sales are projected to be $3100000. An advertising campaign is being

evaluated that costs an additional $110000. How much would sales have to

increase to justify the additional expenditure? (Round the final answer to the nearest dollar unit)

John's

8-year-old Car requires repairs estimated at $11000 to make

it road worthy again. His wife suggested that he should buy a

5-year-old used Jeep instead for $11000 cash. Estimated costs for the two cars are the following:

	8-yr-old Car	Jeep
Acquisition cost	$30000	$11000
Repairs	$11000	—
Annual operating costs
(Gas, maintenance, insurance)	$2408	$2058

What should John do? What are his

savings in the first year?

Company X produces two product lines: T-shirts

and Sweatshirts. Product profitability is analyzed as follows:

	T-SHIRTS	SWEATSHIRTS
Production and sales volume	72000 units	30000 units
Selling price	$16	$29
DM	$2.5	$5
DL	$4.8	$7.2
Manufacturing OH	$1.2	$3
Gross profit	$7.5	$13.8
Selling and administrative	$3.9	$7
Operating profit	$3.6	$6.8

Company X's managers have decided to revise their current assignment of overhead

costs to reflect the following ABC cost information:

Activity	Activity cost	Activity-cost driver
Supervision	$144840	Direct labor hours (DLH)
Inspection	$160389	Inspections

Activities Demanded

T-SHIRTS	SWEATSHIRTS
0.75 DLH/unit	1.60 DLH/unit
54000 DLHs	48000 DLHs
50000 inspections	20000 inspections

Under the revised ABC system,

overhead costs per unit for the Sweatshirts will be: (Round the final answer to the nearest cent)

Company X produces a part that is used in the manufacture of one of its

products. The costs associated with the production of 15727 units of this

part are as follows:

Direct materials	$85000
Direct labor	125000
Variable factory overhead	60000
Fixed factory overhead	135000
Total costs	$405000

Of the fixed factory overhead costs, $55782

is avoidable. Company Y has offered to sell 15727 units of the same

part to Company X for $50 per unit.

Assuming there is no other use for the

facilities, Company X should (round the final answer to the nearest unit):

buy the part, as this would save the company $325782

buy the part, as this would save $24 per unit

make the part, as this would save $29 per unit

make the part, as this would save $24 per unit