Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 23-4 Make or buy decision LO A1 Gilberto Company currently manufactures 70,000 units per year of one of lts cruclal parts. Variable costs are

image text in transcribed

Exercise 23-4 Make or buy decision LO A1 Gilberto Company currently manufactures 70,000 units per year of one of lts cruclal parts. Variable costs are $2.30 per unit, fixed costs related to making this part are $70,000 per year, and allocated fixed costs are $35,000 per year. Allocated fixed costs are unavoldable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.40 per unit guaranteed for a three-year period. Calculate the total Incremental cost of making 70,000 and buying 70,000 units. Should the company continue to manufacture the part, or should It buy the part from the outside supplier? Complete this question by entering your answers in the tabs below Costs to Make Costs to BuySupplien Calculate the total incremental cost of making 70,000 units. (Round cost per unit answer to 2 decimal places.) Incremental Costs to Make Relevant Amount perRelevant fixed Total relevant costs costs Unit Total incremental cost to make Costs to Make Costs 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

Modern Auditing

Authors: Graham W. Cosserat, Neil Rodda

3rd Edition

0470319739, 9780470319734

More Books

Students also viewed these Accounting questions