Parasducts A toal of 16.000 units of this evel of actny\'sAccounting Department
ID: 2599829 • Letter: P
Question
Parasducts A toal of 16.000 units of this evel of actny'sAccounting Department reports the following 0 Part A42 is used by Eigin Coeporation to are produced and used every year costs of producing the port ai this level of activity Per Unit $7.50 Direct materials Direet labor. Variable manufacturing overhead Supervisoe's salary eoverhead580 S5.50 $5.60 Depreciation of special equipment. 58.00 Allocated general overhead.$5.30 An outside supplier has offered to make the part and sell it to the company direct labor is accepted, the supervisor's salary and all of the variable costs, ineluding lingthee rect4 beach.anthis offer fixed costs of the entire company. y's other What would be avoided. The special equipment used to make the part was many years ago and has no salvage value or other use. The allocated general overhead represent none of which would be avoided if the part were purchased in In addition instead of space used to make part A42 could be used to make more of one of the compintw impact on the company's overall net operating income of buying part A42 from the ounts the A. Net operating income woald decrease by $143.400 per year B. Net operating income would decrease by $23,400 per year C. Net operating income would increase by $23,000 per year D. Net operating income would decrease by $189,400 per year. E. None of the above. 11. Yukon Perfume Corporation manufactures three distinct perfumes (I, II, and II) from a single joirt process. The three perfumes can be sold to discount stores in the form they are in at the split-off point. However, if the perfumes are further processed, they can be sold to specialty stores. Costs related to each batch of perfume separation is as follows: Sales value at split-off point. Allocated joint costs... Sales value after further processing... Perfume I Perfume I1 Perfume I11 $900 $1.000 3,500 $2,500 $2,000 $500 $1,500 $1,000 $800 $1,000 Cost of further processing. 1,600 $1,400 For which productis) above would it be more profitable for Yukon to sel than at the split-off point? A. I only B. III only C. 1 and II only l after further processing rather D. Il and III only E. I, II, and IIIExplanation / Answer
Answer: (11)
Perfume I
Perfume II
Perfume III
Sales value after further processing
3500
2500
2000
Less: sales value at split-off point
1500
800
900
Additional sales value from further processing
2000
1700
1100
Less: Additional costs of processing
1600
1400
500
Increased profits from further processing
$400
$300
$600
There is increase in profit in all three perfumes.
Answer is E. I, II and III
Perfume I
Perfume II
Perfume III
Sales value after further processing
3500
2500
2000
Less: sales value at split-off point
1500
800
900
Additional sales value from further processing
2000
1700
1100
Less: Additional costs of processing
1600
1400
500
Increased profits from further processing
$400
$300
$600
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.