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can someone help me with this practice problem The unit product cost of a part is as follows: Direct materials Direct labor Variable manufacturing overhead
can someone help me with this practice problem The unit product cost of a part is as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $13.10 20.10 3.10 10.10 $46.40 The company makes 9.000 units per year of the part. The company has an offer to purchase all the parts it needs for $4240 a unit. If the company accepts this offer, the space that is freed up can be used to produce another product. The new product would generate additional contribution margin of $48.600 per year. if the company decides to buy the part, all of the direct labor cost of the part would be avoided. However, $5.30 of the fixed manufacturing overhead cost being applied to the part would continue even if the part was purchased. The company's remaining products would absorb the fixed overhead cost. Required: a. How much of the unit product cost of $46.40 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? a. Relevant manufacturing cost b por unit Financial advantage Financial disadvantage
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