An outside supplier has offered to provide the annual requirement of 7,200 of the parts for only $13 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:

Super corporation produces a part in the manufactures of its product. The unit cost is $21 computed as follows:

An outside supplier has offered to provide the annual requirement of 7,200 of the parts for only $13 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:

                                                                        $

Direct material                                                 6

Direct labour                                                    8

Variable manufacturing overhead                2

Fixed manufacturing overhead                     5

Total cost                                                        21

Answer:

Total financial advantage of buying from the supplier $43,200

Explanation:

Unit relevant variable  cost of making= 6+8 +2 = 16

                                                                                    $

Variable cost of making (   16×    7200) =             115,200      

Variable of buying           (13   ×7200)                    93,600

Savings in variable cost                                         21,600

Savings in fixed cost  (60%*72300 × 5)                 21600

Total savings from buying                                   43,200

 Total financial advantage of buying from the supplier $43,200

Teall Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month: Budgeted level of activity 9,000 MHs Actual level of activity 9,100 MHs Standard variable manufacturing overhead rate $ 6.20 per MH Budgeted fixed manufacturing overhead cost $ 55,000 Actual total variable manufacturing overhead $ 56,600 Actual total fixed manufacturing overhead $ 59,500 What was the fixed manufacturing overhead budget variance for the month?

Which of the following statement(s) is(are) true regarding municipal bonds? I) A municipal bond is a debt obligation issued by state or local governments. II) A municipal bond is a debt obligation issued by the federal government. III) The interest income from a municipal bond is exempt from federal income taxation. IV) The interest income from a municipal bond is exempt from state and local taxation in the issuing state.

Sheffield Corp. issued $7080000 of 11%, ten-year convertible bonds on July 1, 2020 at 96.1 plus accrued interest. The bonds were dated April 1, 2020 with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1416000 of these bonds were converted into 600 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion. If "interest payable" were credited when the bonds were issued, what should be the amount of the debit to "interest expense" on October 1, 2020

Proper payroll accounting methods are important for a business for all of the following reasons except a.payroll is subject to various federal and state regulations b.good employee morale requires timely and accurate payroll payments c.to help a business with cash flow problems by delayed payments of payroll taxes to federal and state agencies d.payroll and related payroll taxes have a significant effect on the net income of most businesses

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Milton Friedman argues that __________.
O corporations today should adopt a broader view of their social responsibilities than they have in the past.
O corporate officials have a social responsibility that goes beyond serving the interests of their stockholders.
O strict governmental controls are necessary if society is to maximize its overall economic well-being.
O a business's only social responsibility is to maximize profits within the rules of the game.

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Whitmer Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.07 direct labor-hours. The direct labor rate is $9.00 per direct labor-hour. The production budget calls for producing 4,200 units in February and 4,700 units in March. Required: Prepare the direct labor budget for the next two months, assuming that the direct labor work force is fully adjusted to the total direct labor-hours needed each month. (Round "labor-hours per unit"

Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: Service Depts. Production Depts. Payroll Maintenance Cutting Assembly Direct costs $ 20,400 $ 25,500 $ 76,500 $ 105,400 No. of personnel 15 15 45 Sq. ft. of space 10,000 15,000 The total cost of operating the Maintenance Department for the current period is:

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Required:
(a) Prepare the journal entry to record the issuance of the bonds and the related bond issue costs incurred on January 1, 2019.
(b) Prepare a bond amortization schedule up to and including January 1, 2023, using the effective-interest method.

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Compute the total amount of depletion for 2020.

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