Can\'t get this right please help if possible Cullumber Water Co. is a leading p
ID: 2563561 • Letter: C
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Can't get this right please help if possible
Cullumber Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 40,650 timers, the company has calculated the following unit costs. Direct fixed costs include supervisory and clerical salaries and equipment depreciation Direct materials Direct labor Variable manufacturing overhead Direct fixed manufacturing overhead Allocated fixed manufacturing overhead $12 8 (30% salaries, 70% depreciation) Total unit cost $35 Clifton Clocks has offered to provide the timer units to Culumber at a price of $35 per unit. If Cullumber accepts the offer, the current timer unit supervisory and clerical staff will be laid off x Your answer is incorrect. Try again Calculate the total relevant cost to make or buy the timer units. (Round answers to 0 decimal places, e.g. 5,275.) Make Buy 35 Total relevant cost s x Your answer is incorrect. Try again Assuming that Cullumber Water has no other use for either the facilities or the equipment currently used to manufacture the timer units, should the company accept Clifton's offer? Yes x Your answer is incorrect. Try again Assume that if Cullumber Water accepts Clifton's offer, the company can use the freed-up manufacturing facilities to manufacture a new line of growing lights. The company estimates it can sell 94,270 of the new lights each year at a price of $12. Vable costs of the lights are expected to be $9 per unit. The timer unit supervisory and clerical staff would be transferred to this new product line. Calculate the total relevant cost to make the timer units and the net cost if they accept Clifton's offer Total relevant cost to make 32 Net relevant cost if they accept Clifton's offer $ xYour answer is incorrect. Try again Should Cullumber Water accept Clifton's offer? Accept Clifton's offerExplanation / Answer
Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up Statementshowing Computations Paticulars Make Buy Direct Materials = 40650*12 487,800.00 Direct Labour= 40650*7 284,550.00 Variable Manufacturing overhead=40650*3 121,950.00 Fixed Manu O/H = 40650*8*30% 97,560.00 Purchase cost = 40650*35 1,422,750.00 Total Relevant cost 991,860.00 1,422,750.00 No of units 40,650.00 40,650.00 Per Unit relevant cost 24.40 35.00 No company should not accept offer as make cost is lower than buy cost b) Direct Materials = 40650*12 487,800.00 Direct Labour= 40650*7 284,550.00 Variable Manufacturing overhead=40650*3 121,950.00 Fixed Manu O/H = 40650*8*30% 97,560.00 Purchase cost = 40650*35 1,422,750.00 Income from new product = 94270(12-9) - 97560 (185,250.00) Total Relevant cost 991,860.00 1,237,500.00 No of units 40,650.00 40,650.00 Per Unit relevant cost 24.40 30.44 No company should not accept offer as make cost is still lower than buy cost
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