<\/p>
Evaluate relevant costs for a make-or-buy decision.<\/p>
Item<\/strong><\/p><\/td> Make Option ($)<\/strong><\/p><\/td> Buy Option ($)<\/strong><\/p><\/td><\/tr><\/thead> Direct Materials<\/p><\/td> $40,000<\/p><\/td> -<\/p><\/td><\/tr> Direct Labor<\/p><\/td> $30,000<\/p><\/td> -<\/p><\/td><\/tr> Variable Overhead<\/p><\/td> $10,000<\/p><\/td> -<\/p><\/td><\/tr> Purchase Cost<\/p><\/td> -<\/p><\/td> $120,000<\/p><\/td><\/tr> Fixed Costs (Avoidable)<\/p><\/td> $20,000<\/p><\/td> $15,000<\/p><\/td><\/tr><\/tbody><\/table> Requirements:<\/p> Calculate the total relevant cost for each option.<\/p> Identify and explain the relevant costs in the decision-making process.<\/p> Evaluate qualitative factors that should be considered in making the decision.<\/p> <\/p>",
"transcribed_text": "",
"related_book": {
"title": "Fundamental Managerial Accounting Concepts",
"isbn": "978-0077632427, 77632427, 78025656, 978-0078025655",
"edition": "7th edition",
"authors": "Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Old",
"cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/276.jpg",
"uri": "\/textbooks\/fundamental-managerial-accounting-concepts-7th-edition-276",
"see_more_uri": ""
},
"free_related_book": {
"isbn": "B0CRZ6DJS9",
"uri": "\/textbooks\/enstilar-drug-profile-2024-enstilar-drug-patents-fda-exclusivity-litigation-drug-prices-1st-edition-979-8875594137-263497",
"name": "Enstilar Drug Profile 2024 Enstilar Drug Patents Fda Exclusivity Litigation Drug Prices",
"edition": "1st Edition"
},
"question_posted": "2024-06-05 03:51:42",
"see_more_questions_link": "\/study-help\/questions\/business-management-leadership-2023-June-05",
"step_by_step_answer": "The Answer is in the image, click to view ...",
"students_also_viewed": [
{
"url": "\/the-owner-of-a-small-firm-has-just-purchased-a",
"description": "The owner of a small firm has just purchased a personal computer, which she expects will serve her for the next 2 years. The owner has been told that she \"must\" buy a surge suppressor to provide...",
"stars": 3
},
{
"url": "\/study-help\/college-physics-reasoning\/electric-power-is-transmitted-from-the-generation-plant-to-a",
"description": "Electric power is transmitted from the generation plant to a municipality via high-voltage power lines such as those connected to the tower in Figure P20.95. Consider a case with towers typically...",
"stars": 3
},
{
"url": "\/study-help\/psychology\/12-emotions-and-health-affect-learningpositive-emotions-can-support-learning-1984514",
"description": "12. Emotions and health affect learningpositive emotions can support learning and memory, whereas negative emotions can interfere. Emotions also are related to motivation, as you will see in Chapter...",
"stars": 3
},
{
"url": "\/in-1997-bobby-randall-was-hired-at-walmart-at-the",
"description": "In 1997, Bobby Randall was hired at Wal-Mart. At the time, Randall was not a convicted felon but had been previously convicted three times on misdemeanor charges for indecent exposure. At the time of...",
"stars": 3.5
},
{
"url": "\/study-help\/questions\/show-work-not-excel-87-a-vendor-sells-hotdogs-at-9827616",
"description": "show work, not excel #87 A vendor sells hotdogs at $15 \/piece. For every hot dog he spends $12 in the raw material. Additionally he spends $1 for packing each hotdog and monthly $50, $20, $10 as food...",
"stars": 3.5
},
{
"url": "\/study-help\/questions\/22-what-is-the-net-value-of-the-entire-purchase-1353977",
"description": "22: What is the net value of the entire purchase order? ! 23: What is the resulting document number? ! 24: How many elbow pads are in inventory after the purchase order? ! 25: How many road helmets...",
"stars": 3.5
},
{
"url": "\/study-help\/questions\/do-you-feel-that-your-organization-utilizes-your-uniqueness-to-1005905",
"description": "Do you feel that your organization utilizes your uniqueness to its full capability?",
"stars": 3.5
},
{
"url": "\/study-help\/questions\/you-have-been-appointed-to-manage-a-project-that-requires-1008125",
"description": "You have been appointed to manage a project that requires the construction of a three bedroom house (in an area of your choice). the information that you have received includes: Budget - R2.5 Million...",
"stars": 3.5
},
{
"url": "\/study-help\/questions\/answer-the-following-a-what-is-the-role-of-safety-989601",
"description": "Answer the following: a. What is the role of safety inventory? What are the risks of not having safety inventory? Explain thoroughly. b. If the quality of goods provided by suppliers is identical,...",
"stars": 3.5
},
{
"url": "\/study-help\/questions\/all-problems-must-be-formatted-correctly-in-the-report-to-1024414",
"description": "All problems must be formatted correctly in the report to obtain full points. Code must be well commented on and sectioned. Any information missing from the report or the simple act of typing out...",
"stars": 3.5
},
{
"url": "\/study-help\/questions\/give-a-specific-example-of-how-corporate-aviation-has-helped-1006110",
"description": "Give a specific example of how corporate aviation has helped a company or organization. (See the Learn section for links concerning corporate flight departments). Consider businesses or even how...",
"stars": 3.5
},
{
"url": "\/study-help\/questions\/i-need-the-answer-urgently-please-awine-mav-2021-7109494",
"description": "I need the answer urgently please -.. Awine Mav 2021 are as follows 1) After graduation from University of Technolow and Applied Sciences, Hamed started a consultancy business. The transactions...",
"stars": 3.5
},
{
"url": "\/study-help\/intermediate-accounting-volume-2\/in-january-2007-installation-costs-of-8000-on-new-ma-1553865",
"description": "In January 2007, installation costs of $8,000 on new ma- chinery were charged to Repair Expense. Other costs of this machinery of $30,000 were correctly recorded and have been depreciated using the...",
"stars": 3
},
{
"url": "\/study-help\/intermediate-accounting-volume-2\/charlene-rydell-manufacturing-co-is-preparing-its-yearend-financial-statements-1553860",
"description": "Charlene Rydell Manufacturing Co. is preparing its year-end financial statements and is consid- ering the accounting for the following items. 1. The vice president of sales had indicated that one...",
"stars": 3
},
{
"url": "\/study-help\/intermediate-accounting-volume-2\/an-account-payable-of-13000-for-merchandise-pur-chased-on-1553863",
"description": "An account payable of $13,000 for merchandise pur- chased on December 23, 2007, was recorded in January 2008. This merchandise was not included in inventory at December 31, 2007. What effect does...",
"stars": 3
}
],
"next_back_navigation": {
"previous": "\/study-help\/questions\/determine-the-contribution-margin-ratio-and-breakeven-point-in-units-2282845",
"next": "\/study-help\/questions\/calculate-cost-of-goods-sold-cogs-and-ending-inventory-using-2282847"
},
"breadcrumbs": [
{
"name": "Study help",
"link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers"
},
{
"name": "Business",
"link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business"
},
{
"name": "Accounting",
"link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting"
},
{
"name": "Evaluate relevant costs for a make-or-buy decision. Item Make Option ($) Buy",
"link": "https:\/\/www.solutioninn.com\/study-help\/questions\/evaluate-relevant-costs-for-a-makeorbuy-decision-item-make-option-2282846"
}
],
"skill_details": {
"skill_id": "9",
"skill_name": "Accounting",
"parent_id": "1"
}
}}
} |