Posted: April 26th, 2016

Should Mason outsource the component?

Matching. Select the term from the list provided that best matches the description provided.
Definition or Description
a. Composed of numerous separate but interdependent budgets covering sales, production, and administrative expenses.
b. Budgeting technique that allows subordinates and Upper-level managers to work together in setting budgetary targets.
c. Financial planning activities that cover the intermediate range of time (such as whether to buy or lease equipment.
d. Activities associated with long-range decisions such as defining the scope of the business and deciding which products to develop.
e. Budgeted financial statements.
f. The group of individuals responsible for the coordination of budgeting activities,
g. Examples of these budgets include sales budget, inventory purchases budget, and cash budget,
h. Budgeting techniques that keeps managers constantly involved in the budget process.
i. Form of planning that formalizes goals and objectives of a company in financial terms.

1. Budgeting
2. Capital budgets
3. Pro forma financial statements
4. Budgets committee
5. Master budgets
6. Operating budgets
7. Strategic planning
8. Participative budgeting
9. Perpetual budgeting

Problem #3
Mason Company currently produces a component that it uses in making some of its products. Mason has
Calculated the following costs for making the part:

Unit-level costs
Materials $20
Labor 28
Overhead 2
Allocated facility-level costs 10
Total cost $60

Mason is considering outsourcing the component. A supplier has offered to sell the component to Mason for $54 each. Hart needs 10,000 units each year.

Required: Should Mason outsource the component? Support your answer with appropriate computations.

Problem #4
Rodriguez Company is considering purchasing new equipment. The manager has gathered the following

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