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Question
A company produces 100 microwave ovens per month, each of which includes one electrical circuit. The company currently manufactures the circuit in-house but is considering outsourcing the circuits at a contract price of $28 each. Currently, the cost of producing circuits in-house includes variable costs of $26 per circuit and fixed costs of $5,000 per month.
The controller says that they could outsource production of the circuit, and then as long as they could get fixed cost reductions greater than $200 per month, it would improve earnings. Is his statement true or false?
Answer
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Related questions
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Aug
Sep Cash collections
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D) audited form balance sheet.
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Q:
A) chart of accounts.
B) ledger.
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Answer: B
Q:
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B) Revenues decrease owner's equity, so a revenue account's normal balance is a debit balance.
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Q:
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B) finding the account number in the chart of accounts.
C) recording the transaction, including a brief explanation.
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Q:
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C) $12,000 Favorable
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