I don't understand this. Please help? The management of Cullumber...

70.2K

Verified Solution

Question

Accounting

I don't understand this. Please help? image
image
The management of Cullumber Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company's finished product. The following information was collected from the accounting records and production data for the year ending December 31,2022. 1.8,000 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit were: direct materials $4.61, direct labor $4.48, indirect labor $0.48, utilities $0.41. 3. Ficed manufacturing costs applicable to the production of CISCO were: All variable manufacturine and direct fixed costs will be eliminated if CISCO is purchased. Allocated costs will not be eliminated if CISCO is purchased. So if CISCO is purchased, the fived manufacturing costs allocated to CISCO will have to be absorbed by other production departments. 4. The lowest quotation for 8.000 CiseO units from a supplier is $80.520 5. If Cisco units are purchased, freight and inspection costs would be 50.35 per unit, and receiving costs totaling $1,230 per year would be incurred by the Machiring Department. (a) Prepare an incremental analysis for CISCO. (Enter negotive amounts using either a negative sign preceding the number es. -45 or parentheses e. (45)] (b) Eased en your analyte, what decision ihauld manegernent make? The campary shuula cabreitily te ireuseda manaf ecture Cisco

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students