Tessmer manufacturing company produces inventory in a highly

Problem 1 – Tessmer Manufacturing Company produces inventory in a highly automated assembly plant in Olathe, KS.  The automated system is in its first year of operation and management is still unsure of the best way to estimate the overhead costs of operations for budgetary purposes.  For the first six months of operation, the following data was collected:




                                           Machine-hours      Kilowatt-hours     Total Overhead Costs




        January                              3,800                  4,520,000                       $138,000




        February                             3,650                  4,340,000                        136,800




        March                                3,900                   4,500,000                       139,200




        April                                  3,300                   4,290,000                       136,800




        May                                  3,250                   4,200,000                       126,000




        June                                 3,100                   4,120,000                       120,000




Question 1: Use the high-low method to determine the estimating cost function with machine-hours as the cost driver. 




Question 2: Use the high-low method to determine the estimating cost function with kilowatt-hours as the cost driver.




Question 3:  For July, the company ran the machines for 3,000 hours and used 4,000,000 kilowatt-hours of power.  The overhead costs totaled $114,000.  Which cost driver was the best predictor for July? 




Problem 2 – Louder Company manufactures part MNO used in several of its truck models.  A total of 10,000 units are produced each year with production costs as follows:




Direct materials                                 $ 45,000




Direct manufacturing labor                     15,000




Variable support costs                          35,000




Fixed support costs                              25,000




Total costs                                      $120,000




Louder Company has the option of purchasing part MNO from an outside supplier at $11.20 per unit.  If MNO is outsourced, 40% of the fixed costs cannot be immediately converted to other uses.




Question 1:  What amount of the MNO production costs is avoidable?


Question 2:  Should the company outsource MNO?  Why or why not?  

Question 3: What other items should the company consider before outsourcing any of the parts it manufactures? 

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We value our customers and so we ensure that what we do is 100% original..
With us you are guaranteed of quality work done by our qualified experts.Your information and everything that you do with us is kept completely confidential.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

The Product ordered is guaranteed to be original. Orders are checked by the most advanced anti-plagiarism software in the market to assure that the Product is 100% original. The Company has a zero tolerance policy for plagiarism.

Read more

Free-revision policy

The Free Revision policy is a courtesy service that the Company provides to help ensure Customer’s total satisfaction with the completed Order. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

The Company is committed to protect the privacy of the Customer and it will never resell or share any of Customer’s personal information, including credit card data, with any third party. All the online transactions are processed through the secure and reliable online payment systems.

Read more

Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages