Should leland purchase the parts from scott

Assignment Help Managerial Accounting
Reference no: EM133108516

Question - Leland Manufacturing uses 10 units of Part KJ37 each month in its production of radar equipment. The cost to produce one unit of KJ37 is presented in the table below.

Direct materials $1,000

Materials handling (20% of direct materials cost) 200

Direct labor 8,000

Manufacturing overhead 12,000

Total manufacturing cost $21,200

Materials handling represents the direct variable costs of receiving shipment and is applied to direct materials and purchased materials on the basis of direct cost. This is a separate charge, in addition to the manufacturing overhead. Leland's manufacturing overhead is one-third variable and two-thirds fixed. Scott Supply, one of Leland's reliable vendors, has offered to supply KJ37 at a unit price of $15,000. The fixed cost of producing KJ37 is the cost of a special piece of equipment that ensures the quality of each part manufactured. This testing equipment is under a long-term, noncancelable lease. If Leland were to purchase Part KJ37, materials handling costs would not be incurred.

Answer the following question: If Leland purchases the KJ37 units from Scott, the capacity Leland was using to manufacture these parts will be idle. Should Leland purchase the parts from Scott?

Reference no: EM133108516

Questions Cloud

How can you overcome unconscious bias : How did the secondary data analysis support or contradict the literature (the theory) on supporting religious expression in the workplace?
What is interest expense using straight-line amortization : Interest is paid on June 30 and December 31. The proceeds from the bonds are $19,816,160. What is interest expense for 2007, using straight-line amortization
How staff unconscious bias on on religious expression : Design a 2-day staff development session which will be used by managers to develop an awareness around how their staff unconscious bias on on religious expressi
What are the cultural values of the company : Aligning HR with Business Strategies talk about considerations that a company should evaluate in consideration of the HR plan with strategic plan to create a hi
Should leland purchase the parts from scott : If Leland purchases the KJ37 units from Scott the capacity Leland was using to manufacture these parts will be idle. Should Leland purchase the parts from Scott
Why support religious expression for all is difficult : Why support religious expression for all is difficult in the workplace and induct three challenges behind, including supporting reports, journals and newspapers
Goals of the labor relations process : The goals of the labor relations process are efficiency, equity, and voice. Why is each goal important? How might these goals at times be in conflict?
How does anova help to come to a conclusion : What are some of the ways ANOVA could be used to compare means within a work environment or domain of interest? How does ANOVA help to come to a conclusion or t
Define the term - general ledger accounting : Define the following terms - A. General ledger accounting, B. Accounts receivable accounting, C. Accounts payable accounting and D. Chart of accounts (COA)

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

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