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Alpha Manufacturing currently makes 10,000 units of Component X at the following cost per unit:- Direct materials: $7- Direct labor: $5- Variable overhead: $3- Fixed overhead: $6 (50% avoidable if purchased externally) An outside supplier offers to sell the component for $21.50 per unit. What is the total differential cost (savings) of making versus buying?

Same information from question 12: Gamma Company produces two products and is limited to 12,000 machine hours. Data for each product: Product A: Selling price $40, Variable cost $25, Machine hours per unit = 2Product B: Selling price $50, Variable cost $35, Machine hours per unit = 3 If Gamma Company could rent additional machine capacity at $6 per hour, should they rent it? 

Epsilon Company produces two joint products, X and Y. The joint costs are $150,000. The products can be sold at split-off or processed further: Product X:- Units produced: 10,000- Sales value at split-off: $8 per unit- Sales value after further processing: $12 per unit- Additional processing costs: $35,000 Should Product X be processed further?

In the first stage of activity-based costing, costs are assigned from:

Gamma Corp sells to Customer A and has the following data:- Sales to Customer A: $85,000- Cost of goods sold (using ABC): $52,000- Customer service costs (order processing, sales visits): $28,000 What is the customer margin for Customer A?

Sunk costs are:

The maximum price a company should pay for one additional unit of a constrained resource equals:

When a company faces a constraint (bottleneck), it should produce the product mix that:

In the second stage of ABC, costs are allocated from:

In the second stage of ABC, costs are allocated from: