rewriting an answer that already given ,in a deferent way to avoid having Plagiarism Checker

This assessment includes two short cases.

Case 1:

The Lexington Company produces gas grills. This year’s expected production is 20,000 units. Currently, Lexington makes the side burners for its grills. Each grill includes two side burners. Lexington’s management accountant reports the following costs for making the 40,000 burners:

	Cost per Unit	Cost for 40,000 units
Direct materials	$8.00	$320,000
Direct manufacturing labor	4.00	160,000
Variable manufacturing overhead	2.00	80,000
Inspection, setup, materials handling		8,000
Machine rent		12,000
Allocated fixed costs of plant administration, taxes, and insurance		80,000
Total costs		$660,000

Lexington has received an offer from an outside vendor to supply any number of burners Lexington requires at $14.80 per burner. The following additional information is available:

Inspection, setup, and materials-handling costs vary with the number of batches in which the burners are produced. Lexington produces burners in batch sizes of 1,000 units. Lexington will produce the 40,000 units in 40 batches.

Lexington rents the machine it uses to make the burners. If Lexington buys all of its burners from the outside vendor, it does not need to pay rent on this machine.

• If Lexington purchases the burners from the outside vendor, the facility where the burners are currently made will remain idle. The allocated fixed plant administration, taxes, and insurance will not change.

Required:

Q1-1. Describe the decision for Lexington to make.

Q1-2. List all alternatives that Lexington can take regards to the 40,000 burners.

Q1-3. Evaluate the alternatives. Show your calculations and clearly identify relevant costs information.

Q1-4. What are qualitative factors that Lexington should consider when deciding whether to outsource?

Case 2:

Slugger Corporation produces baseball bats for kids that it sells for $36 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows:

	Cost per Bat	Total costs
Direct materials	$13	$650,000
Direct manufacturing labor	5	250,000
Variable manufacturing overhead	2	100,000
Fixed manufacturing overhead	6	300,000
Variable selling expenses	3	150,000
Fixed selling expenses	8	100,000
Total costs	$31	$1,550,000

Additional information:

Suppose Slugger is currently producing and selling 40,000 bas. At this level of production and sales, its fixed costs are the same as given in preceding table.

Bench Corporation wants to place a one-time special order for 10,000 bats at $23 each.

• Suppose Slugger will incur no variable selling costs for this special order.

Required:

Q2-1. Describe the decision for Slugger to make.

Q2-2. List all assumptions when Slugger makes the special order decision.

Q2-3. Should Slugger accept this one-time special order? Show your calculations and clearly identify relevant revenues and costs information.

Q2-4. What other impact should Slugger consider in deciding whether to accept this special order?

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