part B - if sunland suddenly finds an opportunity to rent out the unused capacity of its factory for 77,600 per year would your answer change part (a) change?
Added by Francisco A.
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Determine the current financial situation of Sunland without the rental income from the unused capacity of the factory. Show more…
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Required information [The following information applies to the questions displayed below.] The Gilster Company, a machine tooling firm, has several plants. One plant, located in St. Cloud, Minnesota, uses a job order costing system for its batch production processes. The St. Cloud plant has two departments through which most jobs pass. Plant-wide overhead, which includes the plant manager's salary, accounting personnel, cafeteria, and human resources, is budgeted at $200,000. During the past year, actual plantwide overhead was $185,000. Each department's overhead consists primarily of depreciation and other machine-related expenses. Selected budgeted and actual data from the St. Cloud plant for the past year are as follows: Department A Budgeted department overhead (excludes plantwide overhead): $196,000 Actual department overhead: $142,000 Expected total activity: Direct labor hours: 36,000 Machine-hours: 14,000 Actual activity: Direct labor hours: 38,500 Machine-hours: 14,500 Department B Budgeted department overhead (excludes plantwide overhead): $559,000 Actual department overhead: $574,000 Expected total activity: Direct labor hours: 10,000 Machine-hours: 43,000 Actual activity: Direct labor hours: 9,400 Machine-hours: 45,000 For the coming year, the accountants at the St. Cloud plant are in the process of helping the sales force create bids for several jobs. Projected data pertaining only to job no. 110 are as follows. Direct materials: $16,500 Direct labor cost: Department A (2,000 hr): 30,000 Department B (500 hr): 10,000 Machine-hours projected: Department A: 140 Department B: 1,200 Units produced: 10,000 f. Would your response to part e change if the St. Cloud plant could use the facilities necessary to produce parts for job no. 110 for another job that could earn an incremental profit of $17,000? Incremental profit earned by producing the other job: $17,000 Incremental cost of buying the parts from the subcontractor Increase in total profits
Akash M.
As a recent graduate of this college, you have landed a job in production management for Universal Clones, Inc. You are responsible for the entire company on weekends. Your costs are shown below: Quantity Average Total Cost 500 200 501 201 Your current level of production is 500 units. All 500 units have been ordered by your regular customers. The phone rings. It's a new customer who wants to buy one unit of your product. This means you would have to increase production to 501 units. Your new customer offers you $450 to produce the extra unit." a. Should you accept this offer? b. What is the net change in the firm's profit?
Andrew D.
XM Company currently buys 15,000 units of a part used to manufacture its product at $39 per unit. The supplier recently informed XM Company that a 20 percent increase will take effect next year. XM has some additional space and could produce the units for the following per-unit costs (based on 15,000 units): Direct materials $18 Direct labor $12 Variable manufacturing overhead $10 If XM purchases the units from the supplier, XM can rent out the plant for $22,500 per year. Required: a. Should XM Company buy the part externally or make it internally? Use differential analysis to support your answer. b. If any costs were excluded from the analysis, briefly explain why each cost was not used in the analysis.
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