Define the difference in income between the alternatives

Assignment Help Accounting Basics

Reference no: EM131764887

Question: Juanita Company must decide whether to make or buy some of its components for the appliances it produces. The costs of producing 166,000 electrical cords for its appliances are as follows.

Direct materials: $90,000;

Variable overhead: $32,000;

Direct labor: 20,000;

Fixed overhead: 24,000

Instead of making the electrical cords at an average cost per unit of $1.00 ($166,000 + 166,000), the company has an opportunity to buy the cords at $0.90 per unit. If the company purchases the cords, all variable costs and one-fourth of the fixed costs will be eliminated. Prepare an analysis showing

(1) whether the company should make or buy the electrical cords, and

(2) the difference in income between the two alternatives.

Reference no: EM131764887

Questions Cloud

Compute the variable overhead rate and efficiency variances : During August, the company incurred $38,594 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances

Write a paper about is inequality necessary : Write a paper about is inequality necessary? Can and should we all function as equals? Explain. Times new roman of two pages.

Create a presentation in which you synthesize your research : Create and deliver strong presentations is a critical skill for all managers, leaders, and employees.

Discuss the customer has no legal obligation to make : Is Carey required to include any of her tips in gross income when the customer has no legal obligation to make

Define the difference in income between the alternatives : Juanita Company must decide whether to make or buy some of its components for the appliances it produces. The costs of producing 166,000 electrical cords.

What conclusions can you draw from the contrast : What are the strategies or characteristics the author identified as key to their resistance strategy. What conclusions can you draw from the contrast?

Transactions involving notes payable for saunders company : Prepare journal entries for the following transactions involving notes payable for Saunders Company, whose fiscal year ends

Assume that student is a class : Write Java statements (ending in a semi-colon) to declare the following variables (plus objects when required).

Compute the paid interest and principal : On July 1, 20D, Bill Company signed a two-year $12,000 note payable with 12 percent interest. At due date, July 1, 20F, the principal and interest will be paid.

User Account

All Pages