The Norran Company Needs 15,000 Units of a Certain Part

question 55

Multiple Choice

The Norran Company needs 15,000 units of a certain part to use in its production cycle. If Norran buys the part from Waterloo Company instead of making it, Norran could not use the released facilities in another activity; thus, all of the fixed overhead applied will continue regardless of what decision is made. Accounting records provide the following data: Cost to Norran to make the part:
Direct materials, $3
Direct labor, $12
Variable overhead, $13
Fixed overhead applied, $8
Cost to buy the part from the Waterloo Company, $27
What should Norran's decision be, and what is the total cost savings that would result?

• A) Buy, $90,000
• B) Buy, $15,000
• C) Make, $90,000
• D) Make, $15,000

Understand the basic structure and function of the endocrine system.

Recognize the relationship between the endocrine system and emotional or physical responses.

Identify the glands of the endocrine system and the hormones they produce.

Understand the interaction between the endocrine system and the nervous system.

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Definitions:

Ending Inventory

The price of commodities accessible for purchase following the conclusion of an accounting session.

Ending Inventory

The total value of all inventory, including raw materials, work-in-progress, and finished goods, that a company has at the end of an accounting period.

Financial Statements

Reports that provide detailed information about a company's financial performance and position, typically including the balance sheet, income statement, and cash flow statement.

Equity

The value that would be returned to shareholders if all the assets of a company were liquidated and all its debts paid off. It represents ownership interest in the company.