التكنولوجيا UNIVERSITY OF BUSINESS AND TECHNOLOGY (D) Delta Company produces mobiles and purchases batteries at $30 per unit. The management proposes producing the batteries instead of purchasing them. The annual quantity of batteries is 50,000 units. The costs of producing the batteries are: - $20 variable cost per unit, -The company will pay an annual rent of $250,000 to rent a new machine to produce the batteries. - The general (old) fixed cost for the company is $500,000. Do you advise the company to produce the batteries or to purchase it? Justify? (E) Nile Co. can produce 2 products, A & B; the following data is estimated to help in preparing the production plan for the coming period to maximize the profit: Price Variable cost Demand (maximum sales) Machine hours per unit A B $ 30 $50 21 30 8000 units 4000 units 3 hours 5 hours The total machine hours are 32000 hours (maximum capacity). Required: complete the following table and determine the production plan. A B Price Variable cost Contribution margin per unit Machine hours per unit Contribution margin per hour

التكنولوجيا UNIVERSITY OF BUSINESS AND TECHNOLOGY (D) Delta Company produces mobiles and purchases batteries at $30 per unit. The management proposes producing the batteries instead of purchasing them. The annual quantity of batteries is 50,000 units. The costs of producing the batteries are: - $20 variable cost per unit, -The company will pay an annual rent of $250,000 to rent a new machine to produce the batteries. - The general (old) fixed cost for the company is $500,000. Do you advise the company to produce the batteries or to purchase it? Justify? (E) Nile Co. can produce 2 products, A & B; the following data is estimated to help in preparing the production plan for the coming period to maximize the profit: Price Variable cost Demand (maximum sales) Machine hours per unit A B $ 30 $50 21 30 8000 units 4000 units 3 hours 5 hours The total machine hours are 32000 hours (maximum capacity). Required: complete the following table and determine the production plan. A B Price Variable cost Contribution margin per unit Machine hours per unit Contribution margin per hour

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11E

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