Exercise 23-2 Make or buy LO P1 Gelb Company currently manufactures 42,500 units per year of a key component for its manufacturing process. Variable costs are $2.95 per unit, fixed costs related to making this component are $71000 per year, and allocated fixed costs are $83,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making 42 500 units and buying 42,500 units should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. ces Costs to Make Costs to Buy Outside Supplier Calculate the total incremental cost of making 42,500 units. (Round "variable cost per unit" answers to 2 decimal places.) Incremental Costs to Mako Relevant Amount per Unit Relevant Fixed Costs Total Relevant Costs Variable star Calculate the total incremental cost of making 42,500 units and buying 42,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Outside Supplier Calculate the total incremental cost of making 42,500 units. (Round variable cost per unit" answers to 2 decimal places.) Incremental Conts to Make Relevant Amount per Unit Relevant Fixed Costs Total Relevant Costs Variable cost per unit Fored manufacturing casts Total incremental cost to make Costs to Buy > Prey Next Calculate the total incremental cost of making 42,500 units and buying 42,500 units. Should it continue to manufacture the component or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of buying 42,500 units. (Round "purchase price per unit answers to 2 decimal places.) Incremental Costs to Buy Relevant Relevant Total Relevant Amount per Fixed Costs Costs Unit Purchase price per unit Total incremental cost to buy Pay 1 of 1 Next Gelb Company currently manufactures 42,500 units per year of a key component for its manufacturing process. Variable costs are $2.95 per unit, fixed costs related to making this component are 571.000 per year, and allocated fixed costs are $83,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $350 per unit Calculate the total incremental cost of making 42,500 units and buying 42,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Outside Supplier Should it continue to manufacture the component, or should it buy this component from the outside supplier m Should Gelb make the part or purchase it from the outside supplier?
