15 part A & B

Kando Company currently pays $19 per unit to buy a part for a product it manufactures. Instead, Kando could make the part for per unit costs of $8 for direct materials, $6 for direct labor, and $2 for incremental overhead. Kando normally applies overhead costs using a predetermined rate of 200% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (b) Should Kando make or buy the part? B2B Company is considering the purchase of equipment that would allow the company to add a new product to its line. The equipment costs $192,000 and has a 12-year life and no salvage value. The expected annual income for each year from this equipment follows. (a) Compute the annual net cash flow. (b) Compute the payback period. (c) Compute the accounting rate of return for this equipment. Compute the annual net cash flow. Compute the payback period. Compute the accounting rate of return for this equipment