ACCT 505 Managerial Accounting Entire Course

$240,000
The Procurement Department provided the following supplier pricing:
Supplier A price per hinge
$11.00
Supplier B price per hinge
$10.75
Supplier C price per hinge
$10.50
The supplier pricing was obtained in response to a formal request for proposal (RFP). Procurement has determined
these suppliers meet Globe’s technical specifications and quality requirements.
If Globe stops producing the part internally, 10% of the fixed manufacturing overhead would be eliminated.
Required: Prepare a make-or-buy analysis showing the annual advantage or disadvantage (in dollars) of accepting
an outside supplier’s offer. Should the company buy the parts? If so, from which supplier?
3. (TCO E) Mesa Company produces a single product. Operating data for the company and its absorption costing
income statement for the last year are presented below:
Units in beginning inventory
2,000
Units produced
9,000
Units sold
10,000
Sales
$100,000
Less cost of goods sold:
Beginning inventory
12,000
Add cost of goods manufactured
54,000
Goods available for sale
66,000
Less ending inventory
6,000
Cost of goods sold
60,000
Gross margin
40,000
Less selling and admin. expenses
28,000
Net operating income
$12,000
Variable manufacturing costs are $4 per unit. Fixed factory overhead totals $18,000 for the year. This overhead was
applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold.
Required: Prepare a new income statement for the year using variable costing. Comment on the differences between
the absorption costing and the variable costing income statements.
4. (TCO A) The following data (in thousands of dollars) have been taken from the accounting records of the White
Sands Corporation for the just-completed year.