Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Every year Pina Industries manufactures 5,900 units of part 231 for use in its production cycle. The per unit costs of part 231 are

image text in transcribed

Every year Pina Industries manufactures 5,900 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows: Direct materials $ 3.00 Direct labor 10.00 Variable manufacturing overhead 6.00 Fixed manufacturing overhead Total 10.00 $29.00 Crane, Inc., has offered to sell 5,900 units of part 231 to Pina for $33 per unit. If Pina accepts Crane's offer, its freed-up facilities could be used to earn $11,300 in contribution margin by manufacturing part 240. In addition, Pina would eliminate 50% of the fixed overhead applied to part 231. (a) Calculate total relevant cost to make and net cost to buy. Total relevant cost to make $ Net relevant cost to buy $

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

Step: 3

blur-text-image

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

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield

13th Edition

9780470374948, 470423684, 470374942, 978-0470423684

More Books

Students also viewed these Accounting questions

Question

Are there professional development opportunities?

Answered: 1 week ago