Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
ABC Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units
ABC Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10,000 units of this part are as follows: Direct materials $45.000 Direct labor 65,000 Variable overhead 30.000 Fixed overhead 70,000 Total Cost $210,000 Of the fixed overhead costs, $30,000 is avoidable. XYZ Company has offered to sell 10,000 units of the same part to ABC Corporation for $18 per unit. Assuming there is no other use for the facilities. What should the Corporation do and financial why? 1. How much would it be to make the part? $ 2. How much would it be to buy the part? $ 3. Therefore XYZ Company should
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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