Determine cost, Cost Accounting

Assignment Help:

. Alice Company has received a special order from John. John wishes to buy 100 units of Alice's product at a price of $48. The regular price is $65. The unit cost information follows:

Direct materials 10
Direct labor 12
Variable overhead 13
Fixed manufacturing overhead 15
$50

Alice's total fixed costs will remain the same, even though Alice makes more units of the product. However, to satisfy the special order, Alice has to use a special material. That will increase the direct materials cost by $4 per unit. Also some special processing tool should be rented for $700.

If Alice accepts the special order from John, Alice's profit will:
- Increase or Decrease [choose one]
- By what amount?

Innovan Company is considering replacing its old machine. The machine was purchased 2 years ago at the price of $20,000. It has been depreciated $10,000 a year, and has one more year of useful life. Its current book value $10,000. The machine incurs a $6,000 operating costs per year. At the end of its useful life, its salvage value will be $0. However, at this time, the machine can be sold for $7,000.
The company can buy a new machine for $8,000. It can be used for 1 year and at the end of its life there will be no salvage value. If the new machine incurs a $4,500 operating costs per year.

Compare "Keep" (keep using the old machine) and "Replace" (buy new machine to replace the old one). In terms of profit, "Keep" is:
- Better or Worse [choose one]
- By what amount?

 


Related Discussions:- Determine cost

Calculate the capital account balance, You are given the following informat...

You are given the following information about a sole trader as at 1 January 2012: The value of assets and liabilities were: Non-current assets at net book value £16,800

Making variance analysis more meaningful, Making Variance Analysis More Mea...

Making Variance Analysis More Meaningful To compose variance analysis as useful aid to management is the main objective of variance calculations.  However this can only be don

Example of batch costing, Example of Batch Costing The budgeted variab...

Example of Batch Costing The budgeted variable overheads of a company for the year of 2001 are as given as: Department                Overhead (shs.)

Material usage variance, Describe briefly the possible causes of: (i)   ...

Describe briefly the possible causes of: (i)   the material usage variance, (ii)  the labour rate variance, (iii)  the sales volume profit variance.

Goal definition and communication - standard costing, Goal Definition and C...

Goal Definition and Communication - Behavioural Aspects of Standards Goal Definition The desired goals should be clearly defined to individuals, departments and the organ

Physical measure and net realizable value, Physical Measure and Net Realiza...

Physical Measure and Net Realizable Value Physical Measure/Unit Joint costs are assigned to the joint products according to the ratio of physical measurement of the outpu

Prepare the journal entries to record declaration, Unrecaptured Sec. 1250 G...

Unrecaptured Sec. 1250 Gain and 1231. Mr. Briggs purchased an apartment complex on January 10, 2011, for $2 million with 10% of the price allocated to land. He sells the complex on

What kinds of benefits have communities realized due to fca, Q. What kinds ...

Q. What kinds of benefits have communities realized due to FCA? Communities have understood the following benefits by using FCA: • Rates or tipping fees are set right and fa

Labour variances, L ABOUR VARIANCES Labour Cost Variance (LCV) De...

L ABOUR VARIANCES Labour Cost Variance (LCV) Described by the ICMA, London, 'Labour cost variance is the variation between the standard direct wages specified for the pro

Group bonus plan, #question techniques of payment under group bonus plan ....

#question techniques of payment under group bonus plan .

Write Your Message!

Captcha
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