Glover Company Produces a Part That Has the Following Costs $\$ 9$

question 47

Multiple Choice

Glover Company produces a part that has the following costs per unit:
Direct material                                $\$ 9$
Directlabor                                        4
Variable overhead                              2
$\text { Fixed overhead. }$                         $\underline{6}$
Total                                                $\underline{\$21}$


London Corporation can provide the part to Glover for $23 per unit.Glover Company has determined that 50 percent of its fixed overhead would continue if it purchased the part.However,if Glover no longer produces the part,it can rent that portion of the plant facilities for $70,000 per year.Glover Company currently produces 12,000 parts per year.Which alternative is preferable and by what margin?

• A)Make-$24,000
• B)Make-$60,000
• C)Buy-$10,000
• D)Buy-$46,000

Comprehend the duty of accounting an agent owes to a principal.

Identify requirements for agency by ratification and the efficacy of ratification.

Evaluate scenarios to determine liability in agency contexts.

Understand the doctrine of respondeat superior and its applicability.

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Definitions:

Depreciable Non-Current Asset

A long-term asset subject to depreciation, which systematically reduces its book value over its useful life to account for wear and tear.

NCI Share

NCI Share refers to Non-Controlling Interest share, which is the portion of equity in a subsidiary not attributable directly or indirectly to the parent company.

Useful Life

The estimated period over which a tangible asset is expected to be usable by the entity, affecting its amortization or depreciation rate.

Tax Rate

The rate at which taxes are levied on a person or a business entity.