Prepare a make or buy analysis

Assignment Help Financial Accounting
Reference no: EM13299243

McMullen Co. manufactures automatic door openers. The company uses 15,000 electronic hinges per year as a component in the assembly of the openers. You have been engaged by McMullen to assist with an evaluation of whether the company should continue producing the hinges or purchase them from an outside vendor. The Accounting Department provided the following detail regarding the annual cost to produce electronic hinges: Direct Materials $54,000 Direct Labor 60,000 Variable Manufacturing Overhead 36,000 Fixed Manufacturing Overhead 90,000 Total Costs $240,000 The Procurement Department provided the following supplier pricing: Supplier A price per hinge $11.00 Supplier B price per hinge $10.75 Supplier C price per hinge $10.50 The supplier pricing was obtained in response to a formal request for proposal (RFP). Procurement has determined these suppliers meet McMullen's technical specifications and quality requirements. If McMullen stops producing the part internally, 10% of the manufacturing overhead would be eliminated.

Required: Prepare a make or buy analysis showing the annual advantage or disadvantage of accepting an outside supplier's offer.

Reference no: EM13299243

Questions Cloud

Determine which system represents better treatment option : The company can either buy a single 200m^3 ideal plug flow tank, or three 80m^3 completely mixed tanks that operate in series. the cost is essentially the same. The pollutant is removed as a part of a first order reaction with a rate constant value..
Team building course : Look at the attachment.Choose option 2- which has the paper requirement in details, read it carefully. in fact, the total pages of paper is 7-8 pages. This is a team building course and the topics should be related to aspects around teams.
How much is the bond worth today : Suppose an ExxonMobil Corporation bond will pay $4,500 ten years from now. If the going interest rate on safe 10-year bonds is 4.25%, how much is the bond worth today?
Find the mans upward acceleration : To hoist himself into a tree, a 72.0-kg man ties one end of a nylon rope around his waist and throws the other end over a branch of the tree. determine the man's upward acceleration
Prepare a make or buy analysis : Prepare a make or buy analysis showing the annual advantage or disadvantage of accepting an outside supplier's offer.
What is the net cash used in investing activities : Also, the firm had a net inflow of $ 300,000 from the sale of assets. What is the net cash used in investing activities?
Find discharge flowing over a rectangular sharp crested wire : Find the discharge flowing over a rectangular sharp crested wire, in GPM, which has a width of 9.9 feet and a discharge coefficient of 3.24, if the head above the crest is 1.74 feet.
How much did jake accountant allocate for depreciation : How much did Jake's accountant allocate for depreciation and amortization?
The demand for voice calls has a price-elasticity : At an Asian mobile service provider, the demand for voice calls has a price-elasticity of demand (PED) of -0.085 (or if we take the absolute value, PED = 0.085) and cross-price elasticity (CED) with respect to the price of short message service

Reviews

Write a Review

Financial Accounting Questions & Answers

  Flow of an accounting information system

Why is it considered important to document the flow of an accounting information system and how does a document flowchart assist (i) an accountant, and (ii) a data security expert?

  Is cost-volume-profit analysis still relevant

Is Cost-Volume-Profit Analysis still relevant in the 21st Century business organization? Support your answer with reasoned arguments and references as appropriate.

  Find how many shares are outstanding

Sommerville, Corporation repurchased 25,000 shares. Find how many shares are outstanding?

  Prepare any adjusting and closing entries

Prepare any adjusting and closing entries you think are needed at year end.4. What would the normal balance be of a liability account a post closing trial balance? A revenue account? Drawing?

  Explain balance sheet presentation of the fair value

Explain balance sheet presentation of the fair value adjustment for Perry’s short-term investment.

  How the perpetual and periodic inventory systems differ

Explain whether users of financial statements should exercise caution when interpreting financial statement compliant with GAAP and explain how the choice of depreciation method affects reported profits.

  Evaluate the expected income for the upcoming year

Assuming Denny is correct, what is the expected income for the upcoming year? Assuming Austin is correct, what is the expected income for the upcoming year?

  Amount of property and equipment on the balance sheet

Does the company have capital leases? If so, what are the amounts and terms of the leases? What are the four criteria for a lease to be considered a capital lease? What are the additional criteria for the lessor?

  Evaluate net investment

What is the net investment in the truck project?

  What factors should turner manager and her supervisor

The expansion will cost two million dollars, and is expected to increase operating earnings to $2,100,000. What factors should Turner’s manager and her supervisor, the VP of operations, consider in deciding whether to go forward with the expansio..

  Illustrate what is the break -even point per month in sales

Clydes marina has estimated that fixed costs per month are $300,000 and variable cost per dollar of sales is $0.40. Illustrate what is the break -even point per month in sales dollars?

  What does the term consolidation process mean

what does the term consolidation process mean? What is the purpose of a worksheet during the consolidation process?

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