What are the qualitative factors that innova will have

Assignment Help Accounting Basics
Reference no: EM13529358

Innova uses 1,000 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 ................. 45.00
Overhead .................. 126.50
Total ...................... $236.50

Overhead costs include variable material handling costs of $6.50, 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 $200 per unit.

Instructions

(a) Should Innova purchase the component from the outside vendor if Innova's capacity remains idle?

(b) Should Innova purchase the component from the outside vendor if it can use its facilities to manufacture another product? What information will Innova need to make an accurate decision? Show your calculations.

(c) What are the qualitative factors that Innova will have to consider when making this decision?

Reference no: EM13529358

Questions Cloud

Why is it necessary to use different enzymes : Why is it necessary to use different enzymes at certainsteps of glycolysis as compared withgluconeogenesis? Bevery specific, and discuss in terms of allosteric regulation andconditions under which each pathway would be active.
What is the pentose phosphate pathway : What is carbohydrate loading, and why do marathon runners eat past adinners the night before a big race? What is the pentose phosphate pathway? When does it operate?
Explain what is the new tempearture of the water : An electrical heater warms 180 g of water.its initial tempearture is 35,0 C the heater emits 200J of heat each 1 minute. heat capasity of water is 4,18 J/(k.g). what is the new tempearture of the water after 5 minutes of heating
Differences between glycogenolysis in liver and in muscle : Discuss the regulation, phosphorylation, and activity of glycogen phosphorylase and glycogen synthase in terms of insulin and glucagon. What are the differences between glycogenolysis in the liver and in the muscle?
What are the qualitative factors that innova will have : Should Innova purchase the component from the outside vendor if it can use its facilities to manufacture another product? What information will Innova need to make an accurate decision? Show your calculations.
Determine the spring constant and its uncertainty : You make a plot of displacement (Y ? Y0) in meters versus spring force (Fs) in Newtons for the data you have collected in lab and use LoggerPro to fit a line to your data. Calculate the spring constant and its uncertainty
Explain what is the empirical formula of the compund : A compound was analyzed and found to be composed of 75% cardbon and 25% hydrogen. What is the Empirical formula of this compund
Compute the payback period for the new hoist : Compute the payback period for the new hoist and compute the annual rate of return for the new hoist. (Round to one decimal.)
Depends upon lactic acid oralcoholic fermentation : What are some foods whose production depends upon lactic acid oralcoholic fermentation? determine which organisms areresponsible, which pathway they are using, and (specifically) what product of fermentation is responsible for the effect on the fo..

Reviews

Write a Review

Accounting Basics Questions & Answers

  Expenditures for infrastructure

A government incurred expenditures for its infrastructure as follows: $20 million for general repairs; $21 million to extend the life of existing infrastructure; $22 million for improvements and additions. If depreciation is to be charged, the amo..

  Detail of production

The ABC company is facing a sitation where it has to decide whether to continue its production or stop it. The following is the detail of its production:

  Basics of amount of contract costs incurred

What is the amount of contract costs incurred during the year ended December 31, 2012?

  You are reviewing the december 31 2013 financial statements

1. briefly explain the purpose of the disclosure note on significant accounting policies. provide two examples of what

  Via does business in three different business segments 1

via does business in three different business segments 1. entertainment publishing information and consumer commercial

  Adria lopez created success systems

Adria Lopez created Success Systems on October 1, 2013. The company has been successful, and Adria plans to expand her business. She believes that an additional $86,000 is needed and is investigating three funding sources.

  Assuming that depreciation is to be computed on the

goldman corporation bought a machine on june 1 2010 for 44838 f.o.b. the place of manufacture. freight to the point

  Components of the accounting equation

Components of the Accounting Equation - The financial condition of Greyco Inc. is expressed in the following accounting equation

  How much is niles cost of goods

Assume Nile.com began April with 14 units of inventory that cost a total of $266. During April, Nile purchased and sold goods as - Under the FIFO inventory method, how much is Niles cost of goods sold for the sale on April 14?

  How much interest expense will be recognized

A company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2007. Interest is paid on June 30 and December 31. The proceeds from the bonds are $19,604,145. Using effective-interest amortization, how much interest expense will be re..

  What might have caused caterpillars lifo reserve

For both companies, as of the end of 2009, the existence of a LIFO reserve demonstrates that LIFO inventory is less than it would have been if FIFO had been used. For both companies, compute the ratio of LIFO inventory/FIFO inventory for 2009 endi..

  Time interest earned ratio

For the most recent year, Wilson Enterprises had sales of $689,000, cost of goods sold of $470,300, depreciation expense of $61,200, and additions to retained earnings of $48,560.

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!

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