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Total costs $125,000
An outside supplier has offered to provide Part X at a price of $10 per
unit. If McMullen stops producing the part internally, one third of the
fixed manufacturing overhead would be eliminated.
Required: Prepare a make-or-buy analysis showing the annual advantage
or disadvantage of accepting the outside supplier's offer. Please state
clearly whether the part should be made or bought and share your work.
(Points : 30)
Question 7.7. (TCO B) Buckhorn Corporation bases its predetermined
overhead rate on the estimated machine hours for the upcoming year.
Data for the upcoming year appear below.
Estimated machine hours 37,000
Estimated variable manufacturing overhead $7.77 per machine hour
Estimated total fixed manufacturing overhead $888,000
The actual machine hours for the year turned out to be 35,000.
Required: Compute the company's predetermined overhead rate. (Points :
25)
Set 3
(TCO E) Preparing purchase orders is a(n) (Points : 5)
batch-level activity.
product-level activity.
unit-level activity.
organization sustaining activity.
2. (TCO G) Given the following data, what would ROI be?
Sales $70,000
Net operating income $10,000
Contribution margin $20,000
Average operating assets $50,000
Stockholder's equity $25,000
(Points : 5)
28.6%