In this make or buy problem, you should compute the total cost of making a particular part and the total costs of buying the same part. Try following the solutions steps:

Determine the parameters of the make cost function - the variable costs per unit and the fixed costs.

Determine the fixed costs that are avoidable and the fixed costs that are unavoidable.

Determine the buy price.

Determine the alternative use of the idle resources under the buy,

Note that the question does not ask for the total make costs and the total buy costs but instead asks for the difference between the two. Make sure that you submit the answer as a positive or a negative number as instructed.
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BKF.com provides banks access to sophisticated financial information and analysis via the web, enabling them to instantly evaluate both personal and commercial loan applications. To better focus on its client services, BKF.com is considering outsourcing some of its internal functions. Its controller, Jenny Lee, suggests starting with the company's internal email system. She recently attended a conference and learned that GTE and NBC outsource their email function to companies such as Google and Yahoo. Lee began her analysis by identifying the total costs related to last month's in-house email operation, when there were 3,650 employee mailboxes:

Lee analyzed the computer hardware costs further and determined that:

47% were allocated costs that will continue even if the email system is abandoned.

19% were non-personnel direct costs that will be avoided if the email system is abandoned.

34% were monthly salaries for two, equally paid interns who worked only on the email system.

Mail.com, a leading provider of internet messaging outsourcing services, has offered to host BKF.com's email function for $13.20 per mailbox. BKF.com will still need to pay for the virus protection software, and it will need one of the interns to maintain the virus protection and quarantine suspicious emails. Also, a company has agreed to pay BKF.com $4,100 a month to use the computer storage space that will become available if BKF.com outsources its email function.

Finally, Lee estimates that 3,980 mailboxes will be required per month next year.

REQUIRED

By how much will BKF.com's monthly profits change if they decide to outsource its email function to Mail.com instead of managing the service internally?   (Note: if the buy costs are less than the make costs, enter the difference as a positive number; if the make costs are less than the buy costs, enter the difference as a negative number.)

Statement of Cost of Goods Manufactured and Income Statement for a Manufacturing Company

The following information is available for Shanika Company for 20Y6:

InventoriesJanuary 1December 31

Materials$459,660 $569,980

Work in process827,390 775,170

Finished goods795,210 792,270

Advertising expense$387,020

Depreciation expense-office equipment54,720

Depreciation expense-factory equipment73,530

Direct labor877,770

Heat, light, and power-factory29,070

Indirect labor102,600

Materials purchased860,670

Office salaries expense300,380

Property taxes-factory23,940

Property taxes-headquarters building49,590

Rent expense-factory40,470

Sales4,029,760

Sales salaries expense494,740

Supplies-factory19,950

Miscellaneous costs-factory12,540

Required:

1. Prepare the 20Y6 statement of cost of goods manufactured.

Shanika Company

Statement of Cost of Goods Manufactured

For the Year Ended December 31, 20Y6

$

Direct materials:

$

$

$

Factory overhead:

$

Total factory overhead

Total manufacturing costs incurred in 20Y6

Total manufacturing costs$

Cost of goods manufactured$

2. Prepare the 20Y6 income statement.

Shanika Company

Income Statement

For the Year Ended December 31, 20Y6

$

Cost of good sold:

$

$

$

Operating expenses:

Administrative expenses:

$

$

Selling expenses:

$

Total operating expenses

$

Blossom Ltd. purchased a new machine on April 4, 2014, at a cost of $ 197,600. The company estimated that the machine would have a residual value of $ 14,000. The machine is expected to be used for 10,200 working hours during its four-year life. Actual machine usage was 1,500 hours in 2014; 2,300 hours in 2015; 2,200 hours in 2016; 2,100 hours in 2017; and 2,100 hours in 2018. Blossom has a December 31 year end.

Calculate depreciation for the machine under each of the following methods: (Round expense per unit to 2 decimal places, e.g. 2.75 and final answers to 0 decimal places, e.g. 5,275.)

(1) Straight-line for 2014 through to 2018.

2014 Expense

2015 Expense

2016 Expense

2017 Expense

2018 Expense

(2) Diminishing-balance using double the straight-line rate for 2014 through to 2018.

2014 Expense

2015 Expense

2016 Expense

2017 Expense

2018 Expense

(3) Units-of-production for 2014 through to 2018.

2014 Expense

2015 Expense

2016 Expense

2017 Expense

2018 Expense

Wildhorse Co. purchased equipment on March 27, 2018, at a cost of $ 264,000. Management is contemplating the merits of using the diminishing-balance or units-of-production method of depreciation instead of the straight-line method, which it currently uses for other equipment. The new equipment has an estimated residual value of $ 8,000 and an estimated useful life of either four years or 80,000 units. Demand for the products produced by the equipment is sporadic so the equipment will be used more in some years than in others. Assume the equipment produces the following number of units each year: 14,600 units in 2018; 20,600 units in 2019;19,800 units in 2020; 20,000 units in 2021; and 5,000 units in 2022. Wildhorse has a December year end.

(a)

Prepare separate depreciation schedules for the life of the equipment using: (Round depreciation per unit to 2 decimal places, e.g. 5.28 and final answers to 0 decimal places, e.g. 5,275.)

Straight-line method:

Double-diminishing-balance method:

Units-of-production method:

Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 98,400 units per year is:

The normal selling price is $18.00 per unit. The company’s capacity is 128,400 units per year. An order has been received from a mail-order house for 2,500 units at a special price of $15.00 per unit. This order would not affect regular sales or the company’s total fixed costs.

Required:

1. What is the financial advantage (disadvantage) of accepting the special order?

2. As a separate matter from the special order, assume the company’s inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for these units?

DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $150,000 in year three, and $180,000 in year four. DYI's required rate of return is 11%. What is the modified internal rate of return of this project?

what is the Income statement presentation format of :
a) Net Realizable values: Reduced Cost of goods sold.
b) Realized value Approach: Increase other income

A machine acquired on January 4, 2009, at a cost of $425,000, has an estimated useful life of nine years and an estimated residual value of $65,000. (10 points)

What was the amount of depreciation for the years 2009, 2010, and 2011, using the straight-line method of depreciation?

What was the book value of the machine on January 1, 2012?

Assume that the machine was sold on January 9, 2012, for $290,000 journalize the entry to record the sale                                                               

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Assume that the machine had been sold on January 9, for $310,000, journalize the entry to record the sale.

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Describe the various approaches in assessing the cost of nursing care

Examine the role of recruiting and retaining nurses in the cost of nursing care.

Explain the impact of nursing turnover on nursing care costs.

Examine whether the cost assessment methods used in your organization are effective. Give reasons for your answer.

Describe the various approaches in assessing the cost of nursing care

Examine the role of recruiting and retaining nurses in the cost of nursing care.

Explain the impact of nursing turnover on nursing care costs. Examine whether the cost assessment methods used in your organization are effective. Give reasons for your answer.

Essay style.