Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Answer ASAP for THUMBS UP! The management of ANP Ltd has asked for your assistance in deciding whether to continue manufacturing a part or to

image text in transcribed

Answer ASAP for THUMBS UP!

The management of ANP Ltd has asked for your assistance in deciding whether to continue manufacturing a part or to buy it from an outside supplier. The part, called PZ4, is a component of ANP's finished product. An analysis of the accounting records and the production data revealed the following information for the current year: I. Two (2) employees are assigned to the production department and work full time (1,880 hours each per year) producing PZ4. Each employee is paid $19 per hour; II. The cost of materials per PZ4 unit is $3.20 per unit; III. Production of PZ4 also includes other miscellaneous variable cost of $1.30 per unit. All the above manufacturing costs will be eliminated if Co Ltd outsourced PZ4 from an outside supplier. IV. If PZ4 is outsourced, Co Ltd will need to hire a part-time dispatch employee at a cost of $17,100 per year; V. The lowest price for PZ4 from an outside supplier is $12 per unit; VI. Delivery costs will be $1.00 per unit; VII. The production department produced 11,400 units of PZ4. Required: a) Should ANP Ltd make or buy the PZ4 part? Please provide your answer in the table below. Please do not provide for any workings. Leave blank any cells that do not require an answer. (Please round your answers to whole dollar value.) b) The company should choose the option since this option represents a $ savings

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

The Payroll Audit

Authors: Robert Leach

1st Edition

0955970792, 978-0955970795

More Books

Students also viewed these Accounting questions

Question

List the advantages and disadvantages of the pay programs. page 505

Answered: 1 week ago