Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

11 01:05:10 Gelb Company currently manufactures 45.000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit,

image text in transcribedimage text in transcribedimage text in transcribed

11 01:05:10 Gelb Company currently manufactures 45.000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $71.000 per year, and allocated fixed costs are $83,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 45.000 units and buying 45,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Outside Supplier Calculate the total incremental cost of making 45,000 units. (Round "variable cost per unit" answers to 2 decimal places.) Incremental Costs to Make Variable cost per unit Flaxed manufacturing costs Total incremental cost to make Relevant Amount per Unit Relevant Fixed Costs Total Relevant Costs Cost Mana Costs to Buy >

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

Financial and Managerial Accounting Information for Decisions

Authors: John Wild, Ken Shaw, Barbara Chiappetta

5th edition

978-1259317552, 1259317552, 978-0078025600, 78025605, 978-1259335013, 1259335011, 978-1259347641

More Books

Students also viewed these Accounting questions

Question

Write down the Limitation of Beer - Lamberts law?

Answered: 1 week ago

Question

Discuss the Hawthorne experiments in detail

Answered: 1 week ago

Question

Explain the characteristics of a good system of control

Answered: 1 week ago

Question

State the importance of control

Answered: 1 week ago