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9966 [12]
1 year ago
10

Penagos Corporation is presently making part Z43 that is used in one of its products. A total of 5,000 units of this part are pr

oduced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity:
Per Unit
Direct materials $ 1.10
Direct labor $ 3.10
Variable overhead $ 6.90
Supervisor's salary $ 5.80
Depreciation of special equipment $ 5.20
Allocated general overhead $ 5.60
An outside supplier has offered to produce and sell the part to the company for $20.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $4,000 of these allocated general overhead costs would be avoided.
In addition to the facts given above, assume that the space used to produce part Z43 could be used to make more of one of the company's other products, generating an additional segment margin of $24,000 per year for that product. What would be the annual financial advantage (disadvantage) of buying part Z43 from the outside supplier and using the freed space to make more of the other product?
a. $8,500
b. ($10,500)
c. ($58,500)
d. $24,000
Business
1 answer:
Airida [17]1 year ago
4 0
Answer: B
Hope this helped
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Answer:

a)

$90,280.01

b)

$92,784.19

Explanation:

Use the following formula to calculate the worth of money

Worth of money = Periodic Payment x ( ( ( 1 + Periodic Interest rate )^numbers of periods ) - 1 ) / Periodic Interest rate

a)

Where

Periodic Payment = $1,000 x 12 months per year = $12,000 annually

Periodic interest rate = 9%

Numbers of periods = 6 years

Placing values in the formula

Worth of money = $12,000 x ( ( ( 1 + 9% )^6 ) - 1 ) / 9%

Worth of money = $90,280.01

B)

Where

Periodic Payment = $1,000 x 6 months = $6,000

Periodic interest rate = 9% X 6/12 = 4.5%

Numbers of periods = 6 years x 12/6 = 12

Placing values in the formula

Worth of money = $6,000 x ( ( ( 1 + 4.5% )^12 ) - 1 ) / 4.5%

Worth of money = $92,784.19

3 0
1 year ago
Sara conducted a study in her sixth grade classroom. The study focused on students' interests in science classes. Sara shared wh
AnnyKZ [126]

Answer:

No  

Explanation:

When we do research, it is important to keep confidentiality regarding the personal data from the persons we interview. In other words, we are not supposed to tell other people "who said what" or to publish our results with the names of the people (if we're publishing a paper).

In this case, Sara conducted a study in her sixth grade classroom about interests in science classes, later she shared what individual students said with the seventh-grade teachers. Therefore, she shared confidential information when she told the teacher what individual students said. Therefore, Sara wasn't sharing this information in accordance with ethical research practices.

7 0
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Your body generally absorbs about 20 to 40 percent of the carotenoids you eat. this proportion ______ as the amount of carotenoi
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7 0
1 year ago
The Lamp Company (TLC) produces a variety of lamps in a highly automated manufacturing facility. The costs and cost drivers asso
Vesna [10]

Answer:

$0.184 per unit profit

$0.30 per unit loss

Explanation:

labor hours will be the base to allocate total overhead cost:

Therefore:

Using this formula

Cost to be allocated ÷ Allocation base = Allocation rate

($60,000 + 24,000 + 12,000 + 72,000) ÷ 10,000 labor hours = $16.80 per labor hour

$16.80 x 600 labor hours = $10,080

$10,080÷ 5,000 units = $2.016 per unit

$18 – ($15.80 labor & materials + $2.016 allocated overhead)

= $0.184 per unit profit

Activity-based costing to allocate total overhead cost will be :

$6 per labor hour x 600 hours

= $3,600

Batch-level: $50 per setup x 30 = $1,500

Product-level: .20 percent x $12,000 = $2,400

Facility-level: $1 per unit x 5,000 units = $5,000

Hence:

Total allocation $3,600 + $1,500 + $2,400 + $5,000 = $12,500

Total allocated overhead$12,500

$12,500 ÷ 5,000 units = $2.50 per unit

Sales price per unit – Total product cost per unit = Profit or loss per unit

$18 – ($15.80 labor & materials + $2.50 allocated overhead)

= $0.30 per unit loss

4 0
2 years ago
You have just calculated the acid-test ratio for Peak Performance Sporting Goods [acid test ratio = 1.0]. As a loan officer for
Radda [10]

Answer:

D) An acid-test ratio = 1.0 tells us that without adequate inventory turnover, this company may represent a higher risk. Peak Performance's acid-test ratio shows that the firm maintains $1.00 in current assets for every $1.00 in current liabilities.

Explanation:

The acid test ratio is the ratio which depicts the liquidity of the company. It excludes the inventory, prepaid expenses, etc for calculating it

The formula to compute is shown below:

Acid test ratio is

= Quick assets ÷ current liabilities

Therefore according to the given situation, the correct option is d.

4 0
2 years ago
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