Fluty Corporation Manufactures a Product That Has Two Parts, a and B

question 6

Essay

Fluty Corporation manufactures a product that has two parts, A and B. It is currently considering two alternative proposals related to these parts.
The first proposal is for buying Part A. This would free up some of the plant space for the manufacture of more of Part B and assembly of the final product. The product vice president believes the additional production of the final product can be sold at the current market price. No other changes in manufacturing would be needed.
The second proposal is for buying new equipment for the production of Part B. The new equipment requires fewer workers and uses less power to operate. The old equipment has a net disposal value of zero.
Required:
Tell whether the following items are relevant or irrelevant for each proposal. Treat each proposal independently.
a.Total variable manufacturing overhead, Part A
b.Total variable manufacturing overhead, Part B
c.Cost of old equipment for manufacturing Part B
d.Cost of new equipment for manufacturing Part B
e.Total variable selling and administrative costs
f.Sales revenue of the product
g.Total variable costs of assembling final products
h.Total direct manufacturing materials, Part A
i.Total direct manufacturing materials, Part B
j.Total direct manufacturing labor, Part A
k.Total direct manufacturing labor, Part B

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Definitions:

Cerebrum

The cerebrum is the largest part of the brain, responsible for higher brain functions such as thought, action, memory, and emotion.

Ventricles

Hollow parts or cavities within the brain filled with cerebrospinal fluid that help protect the brain from injury and transport nutrients and waste.

CSF

Cerebrospinal fluid, a clear body fluid found in the brain and spinal cord, that acts as a cushion and provides basic mechanical and immunological protection to the brain.

Sulcus

A groove or furrow on the surface of the brain, separating adjacent gyri, and involved in increasing the brain's surface area.