Question
In: Accounting
Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to...
Frannie Fans currently manufactures ceiling fans that include
remotes to operate them. The current cost to manufacture 10,160
remotes is as follows:
Cost
Direct materials $ 66,040
Direct labor $ 55,880
Variable overhead $ 30,480
Fixed overhead $ 50,800
Total $ 203,200
Frannie is approached by Lincoln Company which offers to make
the remotes for $18 per unit.
Required:
1. Compute the difference in cost between making and buying
the remotes if none of the fixed costs can be avoided. What is the
change in net income?
2. Compute the difference in cost between making and buying
the remotes if $20,320 of the fixed costs can be avoided. What is
the change in net income?
3. What is the change in net income if fixed cost of $20,320
can be avoided and Frannie could rent out the factory space no
longer in use for $20,320?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to...
Frannie Fans currently manufactures ceiling fans that include
remotes to operate them. The current cost to manufacture 10,340
remotes is as follows:
Cost
Direct materials
$
67,210
Direct labor
$
56,870
Variable overhead
$
31,020
Fixed overhead
$
51,700
Total
$
206,800
Frannie is approached by Lincoln Company which offers to make
the remotes for $18 per unit.
Required:
1. Compute the difference in cost between
making and buying the remotes if none of the fixed costs can be
avoided....
Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to...
Frannie Fans currently manufactures ceiling fans that include
remotes to operate them. The current cost to manufacture 10,240
remotes is as follows:
Direct Materials
$66,560
Direct Labor
56,320
Variable Overhead
30,720
Fixed Overhead
51,200
Total
204,800
Frannie is approached by Lincoln Company which offers to make
the remotes for $18 per unit. Required:
1. Compute the difference in cost between making and buying the
remotes if none of the fixed costs can be avoided. What is the
difference in cost...
Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to...
Frannie Fans currently manufactures ceiling fans that include
remotes to operate them. The current cost to manufacture 10,240
remotes is as follows:
Direct Materials
$66,170
Direct Labor
55,990
Variable Overhead
30,540
Fixed Overhead
50,900
Total
203,600
Frannie is approached by Lincoln Company which offers to make
the remotes for $18 per unit.
Required:
1. Compute the difference in cost between
making and buying the remotes if none of the fixed costs can be
avoided. What is the change in net...
Carlise Corp., which manufactures ceiling fans, currently has two product lines, the Indoor and the Outdoor....
Carlise Corp., which manufactures ceiling fans, currently has
two product lines, the Indoor and the Outdoor. Carlise has total
overhead of $121,252.
Carlise has identified the following information about its
overhead activity cost pools and the two product lines:
Activity Cost Pools Cost Driver Cost Assigned
to Pool Quantity/Amount Consumed by Indoor Line
Quantity/Amount Consumed by Outdoor Line
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Kipas Sdn Bhd produces ceiling fans, and is currently operating at 90% of its capacity of 100,000 fans per month.
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Crowder Manufacturing Company manufactures and sells ceiling fans. Crowder incurred the following costs related to quality...
Crowder Manufacturing Company manufactures and sells ceiling
fans. Crowder incurred the following costs related to quality for
the year: Cost of warranty $35,000 Cost of employee quality
training $27,000 Cost incurred to rework fans $18,000 Spoilage cost
(net) $15,000 Cost of handling customer complaints $11,000
Depreciation cost of test equipment $ 6,000 Cost of quality circles
$ 5,000 Maintenance cost of test equipment $ 3,000 Cost of
retesting reworked fans $ 2,000 Cost of final testing of fans $
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Lawrence Corporation sells two ceiling fans, Deluxe and Basic. Current sales total 60,000 units, consist-ing of...
Lawrence Corporation sells two ceiling fans, Deluxe and Basic.
Current sales total 60,000 units, consist-ing of 39,000 Deluxe
units and 21,000 Basic units. Selling price and variable cost
information follow.
Deluxe Basic
Selling price
............................................................................................$86
$74
Variable cost
............................................................................................65
41
Salespeople currently receive flat salaries that total $400,000.
Management is contemplating a change to a compensation plan that is
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A company, currently operating at full capacity, manufactures and sells saucepans at £2 each. Current...
A company,
currently operating at full capacity, manufactures and sells
saucepans at £2 each. Current volume is 100,000 pans per annum with
the following cost structure.
Operating Statement
for year
£
Sales (100,000 at
£2)
200,000
less Marginal
Cost
Labour
80,000
Material
50,000
130,000
=
Contribution
70,000
Fixed
Costs
30,000
=
Net
profit
£40,000
An opportunity has arisen to supply an additional 30,000 pans per
annum at £1.18...
Explain the current capital structure of Amazon and recommendations to optimize capital structure. Include cost of...
Explain the current capital structure of Amazon and
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Howell Corporation produces an executive jet for which it currently manufactures a fuel valve; the cost...
Howell Corporation produces an executive jet for which it
currently manufactures a fuel valve; the cost of the valve is
indicated below:
Cost per Unit
Variable costs
Direct material
$920
Direct labor
600
Variable overhead
300
Fixed costs
Depreciation of equipment
500
Depreciation of building
250
Supervisory salaries
300
The company has an offer from Duvall Valves to produce the part
for $2,000 per unit and supply 1,000 valves (the number needed in
the coming year). If the company accepts...
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