Answered step by step
Verified Expert Solution
Question
1 Approved Answer
company A currently manufactures a subassembly for its main product. The costs per unit are as follows : direct materials$54 direct labor35 variable overhead40 fixed
company A currently manufactures a subassembly for its main product. The costs per unit are as follows :
direct materials$54
direct labor35
variable overhead40
fixed overhead34
total163
company b has contracted company a with an offer to manufacture and then sell 6000 of the subassemblies for $114 each to company a. company a will eliminate $89000 of fixed overhead if it accepts the proposal. Should company a make or buy the subassemblies? What is the diference between the two alternatives?
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