Question

Nelson Manufacturing Company can make 100 units of a necessary component part with the following costs:...

Nelson Manufacturing Company can make 100 units of a necessary component part with the following costs:

Direct Materials

$120,000

Direct Labor

25,000

Variable Overhead

45,000

Fixed Overhead

20,000

If Nelson Manufacturing Company can purchase the component externally for $190,000 and only $5,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Question 15 Rod’s Manufacturing Company can make 100 units of a necessary component part with the...
Question 15 Rod’s Manufacturing Company can make 100 units of a necessary component part with the following costs Direct Materials          $60,000 Direct Labor                  10,000 Variable Overhead        30,000 Fixed Overhead            20,000 If Rod’s Manufacturing Company can purchase the component externally for $95,000 and only $10,000 of the fixed costs can be avoided, what is the correct make-or-buy decision? a. Make and save $5,000            b. Buy and save $5,000 c. Make and save $15,000 d. Buy and save $15,000
Bramble’s Manufacturing Company can make 100 units of a necessary component part with the following costs:...
Bramble’s Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials $121000 Direct Labor 24000 Variable Overhead 53000 Fixed Overhead 30000 If Bramble’s Manufacturing Company can purchase the component externally for $190000 and only $2000 of the fixed costs can be avoided, what is the correct make-or-buy decision? Make and save $15000 Buy and save $15000 Buy and save $10000 Make and save $10000
Sunland Company can produce 100 units of a component part with the following costs: Direct Materials...
Sunland Company can produce 100 units of a component part with the following costs: Direct Materials $12000 Direct Labor 3500 Variable Overhead 9000 Fixed Overhead 11000 If Sunland Company can purchase the component part externally for $31000 and only $4000 of the fixed costs can be avoided, what is the correct make-or-buy decision? Buy and save $6500 Make and save $500 Buy and save $500 Make and save $2500
Swifty Corporation, Inc. can produce 100 units of a component part with the following costs: Direct...
Swifty Corporation, Inc. can produce 100 units of a component part with the following costs: Direct Materials $15300 Direct Labor 6400 Variable Overhead 16300 Fixed Overhead 11000 If Swifty Corporation can purchase the component part externally for $44600 and only $4300 of the fixed costs can be avoided, what is the correct make-or-buy decision? Buy and save $6600 Make and save $100 Buy and save $100 Make and save $2300
Sally manufacturing company currently makes a necessary part with the following costs: Direct materials $80,000 Direct...
Sally manufacturing company currently makes a necessary part with the following costs: Direct materials $80,000 Direct labor $13,000 Variable overhead $40,000 Fixed overhead $27,000 These are the current costs to make 1000 units of the part. An outside sales person has offered to sell the part for $145 each. If the company purchases the parts, it can avoid $4,000 of the current fixed costs. What is the correct "make or buy" decision?
Mindanao Company needed to determine whether to manufacture 8,000 units of X component in-house or to...
Mindanao Company needed to determine whether to manufacture 8,000 units of X component in-house or to buy those units from a supplier at price of $22 per unit. The cost information for in-house manufacturing 8,000 units of X component is provided below. Cost components $ Direct materials 80,000 Direct labour 56,000 Fixed overhead 32,000 Variable overhead 24,000 The fixed overhead will remain the same whether X component is manufactured in-house or purchased externally. Required: Calculate the relevant costs for in-house...
The following manufacturing costs were incurred by the Walmart Company in 2019: Direct Materials $112,500 Direct...
The following manufacturing costs were incurred by the Walmart Company in 2019: Direct Materials $112,500 Direct Labor $175,000 Manufacturing overhead $235,000 These costs were incurred to produce 25,000 units of product. Variable manufacturing overhead was 80% of the direct materials cost. In 2020, the direct material and variable overhead costs per unit will increase by 15%, but the direct labor costs per unit are not expected to change. Fixed manufacturing costs are expected to increase by 7.5%. The company is...
Structuring a Make-or-Buy Problem Fresh Foods, a large restaurant chain, needed to determine if it would...
Structuring a Make-or-Buy Problem Fresh Foods, a large restaurant chain, needed to determine if it would be cheaper to produce 5,000 units of its main food ingredient for use in its restaurants or to purchase them from an outside supplier for $12 each. Cost information on internal production includes the following: Total Cost Unit Cost Direct materials $25,000 $5.00 Direct labor 15,000 3.00 Variable manufacturing overhead 7,500 1.50 Variable marketing overhead 12,000 2.40 Fixed plant overhead 30,000 6.00 Total $89,500...
Wilma Company must decide whether to make or buy some of its components. The costs of...
Wilma Company must decide whether to make or buy some of its components. The costs of producing 64,200 switches for its generators are as follows. Direct materials $29,600 Variable overhead $44,100 Direct labor $33,932 Fixed overhead $82,400 Instead of making the switches at an average cost of $2.96 ($190,032 ÷ 64,200), the company has an opportunity to buy the switches at $2.67 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs...
Exercise 7-8 Innova uses 1,040 units of the component IMC2 every month to manufacture one of...
Exercise 7-8 Innova uses 1,040 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 $61.17 Direct labor 43.50 Overhead 126.50 Total $231.17 Overhead costs include variable material handling costs of $7.40, 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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT