Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A company makes 13.000 units per year of a part it uses in its manufacturing process. The woduct cost of the Direct material 5127 Direct
A company makes 13.000 units per year of a part it uses in its manufacturing process. The woduct cost of the Direct material 5127 Direct labor 20. Variable manufacturing overhead >50 Fred manufacturing overhead unit product cost 545.90 An outside supplier has offered to sell the company all of these parts it needs for $41.80 each. If the company accepts is oftet, the facilities now being used to make the part could be used to make more units of a product for an additional contribution margin of $62.400 per year. If the part were purchased from the outside supplier. $5.70 of the fixed manufacturing overhead cost being applied to the part would continue. This fixed manufacturing overhead cost would be applied to the company's remaining products. a. How much of the unit product cost of $45.90 is relevant in the decision of whether to make or buy the part? (Round "Per Unit" to 2 decimal places.) b. What is the financial advantage (disadvantage) of purchasing the part rather than making it? . You can disregard this part of the
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