Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Gelb Company current manufactures 57.500 units per year of a key component for ts manufacturing process Variable costs are $625 per unit, fed costs related
Gelb Company current manufactures 57.500 units per year of a key component for ts manufacturing process Variable costs are $625 per unit, fed costs related to making this component are $81.000 per year and allocated fixed costs are $62.500 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 suppler for $3.50 per unit. Calculate the total Incremental cost of making 57.500 units and buying 57,500 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 Costs to Outside Make Buy Supplier Calculate the total incremental cost of making 57,500 units. (Round "variable cost per unit" answers to 2 decimal places.) Incremental Costs to Make Relevant Relevant Amount Fixed Relevant per Unit Costs Costs Total Total incremental cost to make Complete this question by entering your answers in the tabs below. Costs to Costs to Outside Make Buy Supplier Calculate the total incremental cost of buying 57,500 units. (Round "purchase price per unit" answers to 2 decimal places.) Incremental Costs to Buy Relevant Relevant Total Amount Fixed Relevant per Unit Costs Costs Total incremental cost to buy (Costs to Make Outside Supplier > Complete this question by entering your answers in the tabs below. Costs to Costs to Outside Make Buy Supplier Should it continue to manufacture the component, or should it buy this component from the outside supplier? Should Gelb make the part or purchase it from the outside supplier?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started