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Accounting Help (1)

The management of heider corporation is considering

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The management of Heider Corporation is considering dropping product J14V. Data from the company's accounting system appear below: Sales $970,000 Variable expenses $382,000 Fixed manufacturing expenses $364,000 Fixed selling and administrative expenses $244,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $221,000 of the fixed manufacturing expenses and $182,000 of the fixed selling and administrative expenses are avoidable if product J14V is discontinued. What would be the effect on the company's overall net operating income if product J14V were dropped? Overall net operating income would increase by $185,000. Overall net operating income would increase by $20,000. Overall net operating income would decrease by $185,000. Overall net operating income would decrease by $20,000. 29. Iwasaki Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 13,500 of the components each year. The unit product cost of the component according to the company's cost accounting system is given as follows: Direct materials $ 9.30 Direct labor 6.30 Variable manufacturing overhead 2.10 Fixed manufacturing overhead 4.10 Unit product cost $21.80 Assume that direct labor is a variable cost. Of the fixed manufacturing overhead, 40% is avoidable if the component were bought from the outside supplier. In addition, making the component uses 2 minutes on the machine that is the company's current constraint. If the component were bought, this machine time would be freed up for use on another product that requires 4 minutes on this machine and that has a contribution margin of $5.70 per unit. When deciding whether to make or buy the component, what cost of making the component should be compared to the price of buying the component? (Round your intermediate calculations and final answer to 2 decimal places.) $19.34 $22.19 $24.65 $22.55
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30. A customer has requested that Inga Corporation fill a special order for 2,700 units of product K81 for $32 a unit. While the product would be modified slightly for the special order, product K81's normal unit product cost is $22.00: Direct materials $ 6.30 Direct labor 4.00 Variable manufacturing overhead 3.40 Fixed manufacturing overhead 8.30 Unit product cost $22.00 Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product K81 that would increase the variable costs by $1.90 per unit and that would require an investment of $17,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, the company's overall net operating income would increase (decrease) by: $17,200 $27,280 $(16,700) $(2,500) 31.
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