Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

46 please 46. Sardi Inc. is considering whether to continue to make a compo ke a component or to buy it from an outside supplier.

46 please
image text in transcribed
image text in transcribed
46. Sardi Inc. is considering whether to continue to make a compo ke a component or to buy it from an outside supplier. The company uses 17.000 oxhe components each year. The unit product cost of the compon me component according to the company's cost accounting system is given as follows: Direct materials $ 8.20 Direct labor 8.301 on 300900 Variable manufacturing overhead 1.20 4.30 Fixed manufacturing overhead +64400 300 tslito at 11900 $ 22.00 eshad, 70% is avaidahls the component were bago the machine that is the company's current constant, the est that requires 4 minutes on this machine and that has a Unit product cost Assume that direct labor is a variable cost of the fixed manufacturing the outside suppligr. In addition, making the component uses 2 minutes component were bought time would be freed up for use on another produk contribution margin of $7.00 per unit. When deciding whether to make or buy the componen the component? (Round your intermediate calculations to 2 decimal place A) $24.21 per unit B) $25.50 per unit C) $20.71 per unit D) $22.00 per unit Take or buy the component, what cost of making the component should be compared to the price of buying Make

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_2

Step: 3

blur-text-image_3

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

Corporate Risk Management

Authors: Faisal F. Al-Thani, Tony Merna

2nd Edition

0470518332, 978-0470518335

More Books

Students also viewed these Accounting questions

Question

What would be your estimate of the MDI for toothbrushes?

Answered: 1 week ago