Question
In: Accounting
Bancroft currently manufacture a subcomponent that is used in its main product. q supplier has offered...
Bancroft currently manufacture a subcomponent that is
used in its main product. q supplier has offered to supply all the
subcomponents needed at a price of $120. Bancroft currently
produces 20,700 subcomponents at the following manufacturing
costs.
direct materials $40
direct labor 32
variable manufacturing overhead 35
fixed manufacturing overhead 22
unit cost $129
a. if bancroft has no alternative uses for then manufacturing
capacity. what would be the profit impact of buying the
subcomponents?
(less or more profit)
b. if bancroft has no alternative uses for the manufacturing
capacity. what would be the maximum price per unit they would be
willing to pay the supplier?
(maximum price)
c. now assume bancroft would avoid 320,000 in equipment leases and
salaries if the subcompomemt were purchased from the supplier. now
what would be the profit impact of buying from the supplier?
(more or less profit)
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Roberts currently manufactures a subcomponent that is used in its main product. A supplier has offered...
Roberts currently manufactures a subcomponent that is used in
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Per unit
Direct materials
$
15.00
Direct labor
9.00
Variable manufacturing overhead
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Fixed manufacturing overhead
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Unit cost
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Regina Ltd has contacted Yoklic with an offer to sell it 5000
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2. Yoklic Ltd currently manufactures a subassembly for its main product. The costs per unit are...
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Direct labour
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Variable overhead
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Fixed overhead
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Regina Ltd has contacted Yoklic with an offer to sell it 5000
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Required
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Make or Buy Walsh Corporation currently makes the nylon mooring cover for its main product, a...
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Walsh Corporation currently makes the nylon mooring cover for its
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