Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 ok 1 Gilberto Company currently manufactures 68,000 units per year of one of its crucial parts. Variable costs are $2.10 per unit, fixed costs

image text in transcribed 1 ok 1 Gilberto Company currently manufactures 68,000 units per year of one of its crucial parts. Variable costs are $2.10 per unit, fixed costs related to making this part are $78,000 per year, and allocated fixed costs are $65,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.35 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 68,000 and buying 68,000 units. Should the company continue to manufacture the part. or should it buy the part from the outside supplier? Complete this question by entering your answers in the tabs below. ces Costs to Make Costs to Buy Outside Supplier Calculate the total incremental cost of making 68,000 units. (Round cost per unit answers to 2 decimal places.) Variable cost per unit Fixed manufacturing costs Total incremental cost to make Incremental Costs to Make Unit Relevant Amount per Relevant Fixed Costs Total Relevant Costs $ 2.10 142,800 78.000 $ 142,800 (Gosts to Mak Costs to Buy > Checimage text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Communication Essentials

Authors: Courtland Bovee

4th Canadian Edition

0133508706, 978-0133508703

More Books

Students also viewed these Accounting questions

Question

2. Follow through with fair consequences.

Answered: 1 week ago