Barrus Corporation makes 30,000 motors to be used in the pro…
Barrus Corporation makes 30,000 motors to be used in the productions of its power lawn mowers. The average cost per motor at this level of activity is as follows: Direct materials $9.50 Direct labor $8.60 Variable manufacturing overhead $3.75 Fixed manufacturing overhead $4.35 This motor has recently become available from an outside supplier for $25 per motor. If Barrus decides not to make the motors, none of the fixed manufacturing overhead would be avoidable and there would be no other use for the facilities. If Barrus decides to continue making the motor, how much higher or lower will the company’s net operating income be than if the motors are purchased from the outside supplier? Assume that direct labor is a variable cost in this company.
Read DetailsGwinnett Barbecue Sauce Corporation manufactures a specialty…
Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce. Gwinnett has the capacity to manufacture and sell 10,000 cases of sauce each year but is currently only manufacturing and selling 9,000. The following costs relate to annual operations at 9,000 cases: Total Cost Variable manufacturing cost $126,000 Fixed manufacturing cost $45,000 Variable selling and administrative cost $18,000 Fixed selling and administrative cost $27,000 Gwinnett normally sells its sauce for $30 per case. A local school district is interested in purchasing Gwinnett’s excess capacity of 1,000 cases of sauce but only if they can get the sauce for $15 per case. This special order would not affect regular sales or total fixed costs or variable costs per unit. If this special order is accepted, Gwinnett’s profits for the year will:
Read DetailsEley Corporation produces a single product. The cost of prod…
Eley Corporation produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 40,000 units per month is as follows: Direct materials $42.60 Direct labor $8.10 Variable manufacturing overhead $1.10 Fixed manufacturing overhead $17.30 Variable selling & administrative expense $1.80 Fixed selling & administrative expense $8.00 The normal selling price of the product is $86.10 per unit. An order has been received from an overseas customer for 2,000 units to be delivered this month at a special discounted price. This order would have no effect on the company’s normal sales and would not change the total amount of the company’s fixed costs. The variable selling and administrative expense would be $1.20 less per unit on this order than on normal sales. Direct labor is a variable cost in this company. Suppose there is not enough idle capacity to produce all of the units for the overseas customer and accepting the special order would require cutting back on production of 700 units for regular customers. The minimum acceptable price per unit for the special order is closest to:
Read DetailsDamon Industries manufactures 12,000 components per year. Th…
Damon Industries manufactures 12,000 components per year. The manufacturing costs of the components were determined as follows: Direct materials $ 114,000 Direct labor 17,500 Variable manufacturing overhead 57,000 Fixed manufacturing overhead 77,000 An outside supplier has offered to sell the component for $18. If Damon purchases the component from the outside supplier, the manufacturing facilities would be unused and could be rented out for $11,300. If Damon purchases the component from the supplier instead of manufacturing it, the effect on operating profits would be a:
Read DetailsVarious theories of the policy process have been advanced th…
Various theories of the policy process have been advanced that help us to understand policy through different perspectives or lenses. Some of these theories are particularly useful in understanding the specific case of disaster and emergency management. Please select at least two theories, provide a brief description of each, and describe how they are particularly relevant for disaster and emergency management.
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