Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3...ThePronghornCompany manufactures5,000units of a part that could be purchased from an outside supplier for $14each.Pronghorn's costs to manufacture each part are as follows: Direct materials

3...ThePronghornCompany manufactures5,000units of a part that could be purchased from an outside supplier for $14each.Pronghorn's costs to manufacture each part are as follows:

Direct materials $3

Direct labor 2

Variable manufacturing overhead 5

Fixed manufacturing overhead 9

Total $19

All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses.

(a)Calculate relevant cost to make. ____________per unit

(c) If Pronghorn could lease the manufacturing facilities to another company for $25,000 per year, what would be the net total cost to outsource production of the part?

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

Accounting Tools For Business Decision Making

Authors: Paul D. Kimmel,  Jerry J. Weygandt,  Jill E. Mitchell

8th Edition

1119791057, 978-1119791058

More Books

Students also viewed these Accounting questions

Question

Case : Karl and June Monroe

Answered: 1 week ago

Question

Behaviour: What am I doing?

Answered: 1 week ago