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ExtremeBDS [4]
2 years ago
4

The SP Corporation makes 38,000 motors to be used in the production of its sewing machines. The average cost per motor at this l

evel of activity is: Direct materials $ 9.70 Direct labor $ 8.70 Variable manufacturing overhead $ 3.55 Fixed manufacturing overhead $ 4.50 An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $24.55. If SP Corporation decides not to make the motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be:
Business
1 answer:
Mariana [72]2 years ago
6 0

Answer:

Explanation:

The fixed cost is relevant in this situation as it can not be avoided and there would be no other use for the facility.

                                                         Unit cost

Direct materials                                   9.70

Variable manufacturing cost              3.55

Fixed  manufacturing overhead         4.50

Direct labor                                          8.70

Total                                                     26.45

Units produced cost of producing 38,000 = 38000* 26.45 = 1,005,100

Cost of buying 38,000 = 38,000 * 24.55 = 932,900

Cost saved = 1,005,100 - 932,900 =72,200

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The research and testing costs associated with the new ovens is said to arise from a product-sustaining activity.

Explanation:

Product-sustaining activities are carried out where appropriate to facilitate the production of each product type. Types of design-sustaining practices include product requirements, technical improvements and special testing procedures.

Such costs may be assigned to each commodity but are not proportional to the number of manufactured units or quantities. Organisation-sustaining operations support the overall production cycle of an organisation.

The ventilation and maintenance of the building, the protection of the facility and the administration are examples of safe facilities.

Products are allocated the costs for the operations at a unit level, batch level and component level depending on the consumption of each commodity. Goods are distributed randomly or viewed as time expense for purpose of facility-sustaining operations.

6 0
2 years ago
Mussatto Corporation produces snowboards. The following per unit cost information is available: direct materials $12, direct lab
o-na [289]

Answer:

$75.40

Explanation:

Mark up is a percentage applied on the cost to get the selling price. In other  word, the difference between the marked-up amount and the total cost gives the profit of the entity.

To get the target selling price, we would first determine the total cost, then apply the mark up percentage on the cost and add the result to the cost.

Total cost per unit

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= 45% * $52

= $23.40

Target selling price = $52 + $23.40

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4 0
2 years ago
Mulch-Rite Inc., based in Germany, has contracted with a company in Italy to export twenty tons of mulch. Mulch-Rite has written
MariettaO [177]

Answer:

B. Draft

Explanation:

Draft -

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It is a type of rough framework of the main idea or project, which helps to frame the original project in a more efficient manner.

Hence, from the given scenario of the question,

The framework or the order written by the Mulch - Rite, is referred to as a draft.

3 0
2 years ago
ABC Bookstore sells packages of books that include both new and used
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Answer: there should be 8 new books in each package and there should be 24 used in each package.

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8 time 17 is 136 then you add 24 times 7 and you get 168. Then you add that together to get a total of 304 dollars

4 0
2 years ago
Suppose GDP in an economy is $3,542 billion. Personal Consumption Expenditures (C) are $2,343 billion, Government Spending (G) i
aleksandrvk [35]

Answer: -$45 billion.

Explanation:

Net Exports refers to Exports out of a country less imports into the country and it is a component of GDP using the Expenditure method. The other components include Government Spending, Investment and Consumption all of which are given in the above question.

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Net Exports = -$45 billion

The Net Exports are negative which means that more goods were imported than were exported.

6 0
2 years ago
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