Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. vista company manufactures electronic equipment. i

Vista Company manufactures electronic equipment. In 2021, it purchased from an...

70.2K

Verified Solution

Question

Accounting

Vista Company manufactures electronic equipment. In 2021, it purchased from an outside supplier the special switches used in each of its products. The supplier charged Vista $2.80 per switch. As an alternative, Vistas CEO considered purchasing either machine A or machine B so the company could manufacture its own switches. The CEO decided at the beginning of 2022 to purchase machine A, based on the following data:
Machine A Machine B
Annual fixed cost (depreciation) $ 143,000 $ 212,000
Variable cost per switch 0.800.35
Required:
1. Assume that machine A has not yet been purchased. What is the annual volume that would make the company indifferent between the two decision alternatives (i.e., purchasing and then using machine A to make the switches versus purchasing the switches from the outside vendor)?
2. Assume that machine A has already been purchased. Is it preferable to use machine A to make the switches or to purchase the switches from the external supplier?
3. Assume that machine A has already been purchased. At what annual volume level should Vista consider replacing machine A with machine B?

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

Chemistry
1.2K views

1. How many grams of ethylene glycol, C2H4(OH)2, are needed per kilogram of water to protect radiator...

Psychology
1.2K views

SUBJECT - US HISTORY ! 1. compare and contrast the ideological similarities or differences of Thomas Jefferson...

Civil Engineering
1.2K views

The columns for a building in central Long Island are to be made of concrete with...

Advance Math
1.2K views

Use the simplex method to solve the linear programming problem. Maximize P = 3x + 2y subject to 3x + 4y ? 33 x + y ? 9 2x + y ? 13 x ?...

Biology
1.2K views

Read this popular tale and answer the question Once a farmer found an abandoned eagle...

Physics
1.2K views

32 The output of gate is low when at least one of its input is...

Physics
1.2K views

A uniform solid hemisphere of mass m and radius R is attached to the roof...

Accounting
1.2K views

Class, what is capitalized interest? Are we ever required to record capitalized interest? Do you...

Accounting
1.2K views

during the year, plum company has a SUTA tax rate of 4.8%. The taxable payroll...

Accounting
1.2K views

DuBois Corporation purchased a non-strategic investment in 1,000 shares of Scotiabank (BNS) for $31 per...

Finance
1.2K views

Which of the following risks apply to international loans? Question 14 options: ...

Finance
1.2K views

*Please answer in excel format. Thank you in advance* P7-15 Common stock value: Variable...