Prepare a make-or-buy analysis showing the annual advantage

Assignment Help Accounting Basics
Reference no: EM132077962

Question - McMullen Co. uses 10,000 units of Part X each year as a component in the assembly of one of its products. The company is presently producing Part X internally at a total cost of $125,000 as follows.

Direct materials

$40,000

Direct labor

30,000

Variable manufacturing overhead

25,000

Fixed manufacturing overhead

30,000

Total costs

$125,000

An outside supplier has offered to provide Part X at a price of $10 per unit. If McMullen stops producing the part internally, one third of the fixed manufacturing overhead would be eliminated.

Required: Prepare a make-or-buy analysis showing the annual advantage or disadvantage of accepting the outside supplier's offer. Please state clearly whether the part should be made or bought and share your work.

Reference no: EM132077962

Questions Cloud

Ultimate goal of your organization training-development plan : The ultimate goal of your organization's training and development plan is to produce employees who are able to provide your company with a competitive edge,
Process used for welcoming new employee into organization : New hire orientation is "the process used for welcoming a new employee into an organization" (UMUC, 2018).
How many dollars of revenue must the company generate : Ritz Furniture has a contribution margin ratio of 0.14. If fixed costs are $173,300, how many dollars of revenue must the company generate
Identify single market and consumer mistake : The objective of this piece of work is to identify a single market/consumer mistake that has had negative consequences for any given company and suggest,
Prepare a make-or-buy analysis showing the annual advantage : Prepare a make-or-buy analysis showing the annual advantage or disadvantage of accepting the outside supplier's offer
The heavyweight segment of the motorcycle market : What factors influenced the company’s decision to enter the heavyweight segment of the motorcycle market in the mid-1990s?
What aspect of us constitution allows federal government : Discuss what aspect of the US Constitution allows the Federal Government to determine that statutes made in the states are unconstitutional.
Prepare the company cash budget for november : Prepare the company's cash budget for November in good form. Make sure to indicate what borrowing, if any
How much will sarah have to invest today : Sarah Wiggum would like to make a single investment and have $1.7 million at the time of her retirement in 32 years. She has found a mutual fund.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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