{"id":7000,"date":"2021-10-11T23:32:08","date_gmt":"2021-10-11T23:32:08","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/problem-7-2a-shatner-manufacturing-company\/"},"modified":"2021-10-11T23:32:08","modified_gmt":"2021-10-11T23:32:08","slug":"problem-7-2a-shatner-manufacturing-company","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/problem-7-2a-shatner-manufacturing-company\/","title":{"rendered":"Problem 7-2a -shatner manufacturing company"},"content":{"rendered":"<div>\n<p><span>Problem 7-2A (Part Level Submission)<\/span><\/p>\n<p><span>The management of Shatner 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\u2019s finished product.<\/span><\/p>\n<p><span>The following information was collected from the accounting records and production data for the year ending December 31, 2014.<\/span><\/p>\n<p><span>1. 7,900 units of CISCO were produced in the Machining Department.<\/span><br \/><span>2. Variable manufacturing costs applicable to the production of each CISCO unit were:<\/span><br \/><span>direct materials $4.70, direct labor $4.87, indirect labor $0.49, utilities $0.42.<\/span><br \/><span>3. Fixed manufacturing costs applicable to the production of CISCO were:<\/span><\/p>\n<p><span>Cost Item Direct Allocated <\/span><br \/><span>Depreciation $2,080 $920 <\/span><br \/><span>Property taxes 530 260 <\/span><br \/><span>Insurance 950 640 <\/span><br \/><span>$3,560 $1,820 <\/span><\/p>\n<p><span>All variable manufacturing and direct fixed costs will be eliminated if CISCO is purchased. Allocated costs will have to be absorbed by other production departments.<\/span><\/p>\n<p><span>4. The lowest quotation for 7,900 CISCO units from a supplier is $83,593.<\/span><br \/><span>5. If CISCO units are purchased, freight and inspection costs would be $0.34 per unit, and receiving costs totaling $1,290 per year would be incurred by the Machining Department.<\/span><\/p>\n<p><span>(a)<\/span><\/p>\n<p><span>Prepare an incremental analysis for CISCO. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)<\/span><\/p>\n<p><span>Make CISCO Buy CISCO Net Income<\/span><br \/><span>Increase<\/span><br \/><span>(Decrease) <\/span><br \/><span>Direct material $ $ $ <\/span><br \/><span>Direct labor <\/span><br \/><span>Indirect labor <\/span><br \/><span>Utilities <\/span><br \/><span>Depreciation <\/span><br \/><span>Property taxes <\/span><br \/><span>Insurance <\/span><br \/><span>Purchase price <\/span><br \/><span>Freight and inspection <\/span><br \/><span>Receiving costs <\/span><br \/><span>Total annual cost $ $ $ <\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Problem 7-2A (Part Level Submission) The management of Shatner 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\u2019s finished product. The following information was collected from the accounting records and production data for the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-7000","post","type-post","status-publish","format-standard","hentry","category-homework-help"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/7000","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=7000"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/7000\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=7000"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=7000"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=7000"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}