Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For many years, Carthage Inc. has manufactured a small electrical part that is used in the manufacture of its standard diesel tractor model. At a

image text in transcribed

For many years, Carthage Inc. has manufactured a small electrical part that is used in the manufacture of its standard diesel tractor model. At a business volume of 60,000 units per year, the unit cost and total cost of production for this part is calculated as follows: An outside supplier offered to provide Carthage Inc. with this electrical component at a cost of only $10 per unit, One-third of the fixed manufacturing overhead costs consist of the supervisor's salary and other costs that can be eliminated in the event of purchase of the par. The remaining two-thirds of the fixed manufacturing overhead costs are amortization of the equipment used, which has no resale value. The decision to purchase the part from an outside supplier would have no effect on the company's common fixed overhead costs and the, space currently used for this production could be leased at $80,000 per year. Should Carthage Inc. purchase the part from an outside supplier. Show calculations to support your Required

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

MP Auditing And Assurance Services W/ACL Software CD ROM A Systematic Approach

Authors: William Messier Jr, Steven Glover, Douglas Prawitt

9th Edition

1259162346, 978-1259162343

More Books

Students also viewed these Accounting questions

Question

8. Explain the relationship between communication and context.

Answered: 1 week ago

Question

d. How were you expected to contribute to family life?

Answered: 1 week ago