The fixed manufacturing overhead listed above represents an

Assignment Help Accounting Basics

Reference no: EM13576443

Smithtone Company uses 8,000 units of a certain part in production each year. Presently, this part is purchased from an outside supplier at $12 per unit. For some time now there has been idle capacity in the factory that could be utilized to make this part. The following information has been assembled on the unit costs of making this part internally:

The fixed manufacturing overhead listed above represents an allocation of existing costs to this part. However, there would be an increase of $12,000 in fixed manufacturing overhead costs for the salary of a new supervisor.

Suppose that the idle capacity is presently being rented to another company for $32,000 per year. All the other conditions are still the same. If Smithtone chooses to make the part instead of buying it outside, the net advantage or disadvantage would be?

Reference no: EM13576443

Questions Cloud

Under absorption costing can the difference between : adria lopez expected sales of her line of computer workstation furniture to equal 300 workstations at a sales price of

Find the maximum and minimum prices of the boats the dealer : a marine sales dealer finds that the average price of a previously owned boat is 6492. he decides to sell boats that

Angela is single and has no dependents during the current : during the current year angela sustains serious injuries from a snow skiing accident. she incurs the following

Prepare the journal entries to record these transactions on : information related to gilberto pizza and games is presented below.1. on april 5 purchased merchandise from allman

The fixed manufacturing overhead listed above represents an : smithtone company uses 8000 units of a certain part in production each year. presently this part is purchased from an

Office supplies of 600 were on hand at the beginning of the : prepare adjusting entries for the following items.a. depreciation on machinery is 940 for the accounting period.b.

Rntal revenue 6000 freight-out 1800 rent expense 8800 and : the trial balance of revere finest foods on december 31 shows merchandise inventory 25000 sales 162400 sales returns

Discuss the reasons why corporations invest in securities : discuss the reasons why corporations invest in securities. discuss how the market would be affected if they stopped

Compute the inventory turnover ratio for the last two years : compute the inventory turnover ratio for the last two years for ford motor company. this may require you to look up the

User Account

All Pages