A company is trying to determine if Product A should be drop…

A company is trying to determine if Product A should be dropped. Sales of the product total $500,000; variable expenses total $340,000. Fixed expenses charged to the product total $210,000. The company estimates that $60,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the annual financial advantage (disadvantage) for the company of eliminating this product should be:

A company has provided the following contribution format inc…

A company has provided the following contribution format income statement. Assume that the following information is within the relevant range.        Sales (3,000 units) $ 180,000 Variable expenses   108,000 Contribution margin   72,000 Fixed expenses   62,400 Net operating income $ 9,600  The contribution margin ratio is closest to:

A company’s cost formula for its salaries and wages cost is…

A company’s cost formula for its salaries and wages cost is $2,850 per month plus $317 per job. For the month of February, the company planned for activity of 16 jobs, but the actual level of activity was 14 jobs. The actual salaries and wages cost for the month was $7,640. The spending variance for salaries and wages cost in February would be closest to:

A company, which applies manufacturing overhead on the basis…

A company, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations.        Estimated manufacturing overhead $ 157,050 Estimated machine-hours   4,500 Actual manufacturing overhead $ 156,000 Actual machine-hours   4,580  The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company’s predetermined overhead rate for the year.The applied manufacturing overhead for the year is closest to:

A company’s cost formula for its overhead cost is $2,300 per…

A company’s cost formula for its overhead cost is $2,300 per month plus $6 per unit. For the month of July, the company planned for activity of 861 units, but the actual level of activity was 856 units. The actual overhead cost for the month was $7,790. The activity variance for supplies cost in July would be closest to:

A company currently manufactures a component part that it us…

A company currently manufactures a component part that it uses in its products. The costs to produce 5,000 of these components last year were as follows:   Cost per drive Direct materials $ 12   Direct labor   2   Variable manufacturing overhead   5   Fixed manufacturing overhead   7   Total $ 26   An outside supplier has offered to provide the company with all of its component part needs for $27 per drive. If the company accepts this offer, they will be able to use the freed up space to generate an additional $40,000 of income each year to produce more of another product. Only $3 per part of the fixed manufacturing overhead cost above could be avoided. Direct labor is an avoidable cost in this decision. Based on this information, would the company be financially better off making the component parts or buying them and by how much?