Answered step by step
Verified Expert Solution
Question
1 Approved Answer
-24 Gelb Company currently manufactures 60,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs
-24 Gelb Company currently manufactures 60,000 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 $77,000 per year, and allocated fixed costs are $77,500 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 $3.70 per unit. Calculate the total incremental cost of making 60,000 units and buying 60,000 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 60,000 units. (Round "variable cost per unit" answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Relevant Total Relevant Ciyadete 21-24 PIEL YUCELULELY LOY your CVCI STRELITO LOVO Volvvv Costs to Make Costs to Buy makes Buy | Outside Supplier Calculate the total incremental cost of making 60,000 units. (Round "variable cost per unit" answers to 2 Incremental Costs to Make Relevant Amount per Unit Relevant Fixed Costs Total Relevant Costs Total incremental cost to make 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 buying 60,000 units. (Round "purchase price per unit" Incremental Costs to Buy Relevant Amount per Unit Relevant Fixed C5sts Total Relevant Costs Total incremental cost to buy Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Outside Supplier Should it continue to manufacture the component, or should it buy this component from the outside super Should Gelb make the part or purchase it from the outside supplier?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started