Business, 24.11.2021 05:10 book0001

Company A makes downhill ski equipment. Assume that company B has offered to produce ski pole for company A for $18 per pair. Company A needs 100,000 pairs of poles per period. Company A can avoid $125,000 of fixed costs if it outsources; the remaining fixed costs are unavoidable. Company A currently has the following costs at a production level of 100,000 pairs of poles. Manufacturing Costs Total Cost Cost per pair
Direct Materials $750,000 $7.50
Direct Labor $80,000 $0.80
Variable MOH $520,000 $5.20
Fixed MOH $650,000 $6.50
Total $2,000,000 $20.00

Required:
Should company A outsource ski pole production if the next best use of freed capacity is to leave it idle?

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 19:10

Goals that are overly ambitious can discourage employees and decrease motivation, yet the idea of stretch goals is proposed as a way to get people fired up and motivated. as a manager, how might you decide where to draw the line between a “good” stretch goal and a “bad” one that is unrealistic?

Answers: 1

Answer

Business, 22.06.2019 10:10

conquest, inc. produces a special kind of light-weight, recreational vehicle that has a unique design. it allows the company to follow a cost-plus pricing strategy. it has $9,000,000 of average assets, and the desired profit is a 10% return on assets. assume all products produced are sold. additional data are as follows: sales volume 1000 units per year; variable costs $1000 per unit; fixed costs $4,000,000 per year; using the cost-plus pricing approach, what should be the sales price per unit?

Answers: 2

Answer

Business, 22.06.2019 19:00

1. regarding general guidelines for the preparation of successful soups, which of the following statements is true? a. thick soups made with starchy vegetables may thin during storage. b. soups should be seasoned throughout the cooking process. c. finish a cream soup well before serving it to moderate the flavor. d. consommés take quite a long time to cool.

Answers: 2

Answer

Business, 22.06.2019 19:10

The stock of grommet corporation, a u.s. company, is publicly traded, with no single shareholder owning more than 5 percent of its outstanding stock. grommet owns 95 percent of the outstanding stock of staple inc., also a u.s. company. staple owns 100 percent of the outstanding stock of clip corporation, a canadian company. grommet and clip each own 50 percent of the outstanding stock of fastener inc., a u.s. company. grommet and staple each own 50 percent of the outstanding stock of binder corporation, a u.s. company. which of these corporations form an affiliated group eligible to file a consolidated tax return?

Answers: 3

Answer

You know the right answer?

Company A makes downhill ski equipment. Assume that company B has offered to produce ski pole for co...

Questions