acctg 213 ch 11 hw - fixed cost will be per unit. From this...

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Jeremy Liebman Tomcal March 9, 2008 Chapter 11 Ex. 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 28, 33, 35, 37 14. The order of operation has an arrangement of 4, 5, 2, 6, 3, 1. 15. Step 1: The decision is whether or not Austin is going to transfer schools. Step 2: A and B pertain. Step 3: C, E, F, and I pertain. Step 4: None of the letters pertain. Step 5: D, E, F, G, and H pertain. Step 6: J and K pertain. 16. 1 . Either make the component in-house or buy it from Jasper. 2. Alternatives Differential Make Buy Cost to Make Direct materials $7.42 $7.42 Direct labor $2.38 $2.38 Variable overhead $1.75 $1.75 Purchase cost $12.00 ($12.00) Total relevant cost $11.55 $12.00 $(0.45) 3 . They should make the component in-house because it would be $1,845 more if they bought the component from Jasper. Also, all decisions would be in-house and Jasper can work without worrying about other companies producing for them. 17. LaSalle’s operating income will shrink by $1.20 per unit produced, as that is what the
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Unformatted text preview: fixed cost will be per unit. From this information, LaSalle should purchase the component from Jasper because it will save them $3,075. 18. 1. The two alternatives are to either accept or decline the offer from the new customer. 2. Otonic Company should accept the proposal from the customer as it will earn them $.95 in operating income for each unit sold. Thus, they would gain a total of $2,185 in revenue from the sale. 19. Ortonic should not accept the special order because profit will decrease by $2300 (or a dollar a unit) because of the labeling fee. 20. Overall profit would decrease by $60,000 because the company still has to account for the direct fixed expenses (they are sunk costs). 21. Overall profit would decrease by $140,000 because of the original $60,000 from dropping product C and the $80,000 loss that product C would cause upon product B (10% of their CM). 22....
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This note was uploaded on 04/07/2008 for the course ACCTG 213 taught by Professor Tomcal during the Spring '08 term at University of Oregon.

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