Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Business Management Expert

1. Frogers Company produces 40,000 units per year of part it utilizes in products it produces. The unit product cost of this part is find outd as follows:

Direct materials $23.40
Direct labor 22.30
Variable manufacturing overhead 1.40
Fixed manufacturing overhead 24.60
Unit product cost $71.70

Outside supplier has offered to sell company all of these parts it requires for $59.20 a unit. If company accepts this offer, facilities now being used to prepare the part could be utilized to make more units of product that is in high demand. Extra contribution margin on this other product would be $352,000 per year.

If part were bought from outside supplier, all of direct labour cost of part would be avoided. Though, $21.90 of fixed manufacturing overhead cost being applied to part would continue even if part were bought from outside supplier. This fixed manufacturing overhead cost would be applied to company's remaining products.

Required:

a. How much of unit product cost of $71.70 is appropriate in decision of whether to make or purchase the part?

b. Compute the net total dollar advantage (disadvantage) of buying part rather than making it?

c. Determine the maximum amount company must be willing to pay the outside supplier per unit for part if supplier commits to supplying all 40,000 units needed each year?

Business Management, Management Studies

  • Category:- Business Management
  • Reference No.:- M931401

Have any Question? 


Related Questions in Business Management

Security metricsin this we focused on metrics for measuring

SECURITY METRICS In this, we focused on metrics for measuring the success of your IT systems including infrastructure-centric metrics, Web-centric metrics, call center metrics, and financial metrics. Another important ar ...

Management 340 research paperfirst please research the

Management 340 Research Paper First, please research the following types of ethical theory: consequentialism, deontology, relativism, virtue ethics, and justice. Next, choose two philosophers' original texts to examine i ...

Discuss the ways in which a physician office practice can

Discuss the ways in which a physician office practice can optimize its financial condition and benefit its hospital partner. Your response must be at least 200 words in length.

Assignment1 choose a country of interest to you go to the

Assignment 1. Choose a country of interest to you. Go to the Executive Planet website (www.executiveplanet.com) or another website with cross-cultural comparisons and analyze the country in terms of the following cultura ...

Select a current news item pertaining to an ethical

Select a current news item pertaining to an ethical situation in the Middle East that has arisen in a business or non-profit organization. Describe the situation and the organization. Determine what made or makes this si ...

As part of his last act in office suppose president obama

As part of his last act in office, suppose President Obama announces a new program in which the government completely finances a community college education. Use the intertemporal model to show graphically and explain th ...

Workplace continuity and contingency planningthe purpose of

Workplace Continuity and Contingency Planning The purpose of the Business Impact Analysis (BIA) is to identify the exposures and to precisely quantify the potential destructive impact that the exposures could cause on th ...

A local bookstore turns over its inventory once every 3

A local bookstore turns over its inventory once every 3 months. The bookstore's annual cost of holding inventory is 36%. What is the inventory holding cost (in $) for a book that the bookstore purchases for $10 and sells ...

Explain what productservice you will be providingwhat will

Explain what product/service you will be providing. What will the main activities of this business be?

Q1 i have a problem and need your help i am running a small

Q1: I have a problem and need your help. I am running a small shop/convenience store. I am doing pretty well and we employ five people to cover nights and weekends. However some of the people I employ are not as effectiv ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen