managerial accounting

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i need help on these problems - Problem 7-2A The management of Shatner Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. Document Preview: Problem 7-2A The management of Shatner Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company’s finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2014. 1. 8,000 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit were: direct materials $5.32, direct labor $4.12, indirect labor $0.45, utilities $0.43. 3. Fixed manufacturing costs applicable to the production of CISCO were: Cost Item Direct Allocated Depreciation $1,980 $880 Property taxes 540 310 Insurance 950 580 $3,470 $1,770 All variable manufacturing and direct fixed costs will be eliminated if CISCO is purchased. Allocated costs will have to be absorbed by other production departments. 4. The lowest quotation for 8,000 CISCO units from a supplier is $83,231. 5. If CISCO units are purchased, freight and inspection costs would be $0.37 per unit, and receiving costs totaling $1,260 per year would be incurred by the Machining Department. Prepare an incremental analysis for CISCO. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) ShurShot Sports Inc. manufactures basketballs for the National Basketball Association (NBA). For the first 6 months of 2014, the company reported the following operating results while operating at 80% of plant capacity and producing 119,700 units. Amount Sales $4,788,000 Cost of goods sold 3,723,673 Selling and administrative expenses 478,800 Net income $585,527 Fixed costs for the period were cost of goods sold $1,079,500, and selling and administrative expenses... Attachments: 1111.doc

 

Solution ID:565796 | This paper was updated on 26-Nov-2015

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