Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gelb Company currently manufactures 42,000 units per year of a key component for its manufacturing process. Variable costs are $2.95 per unit, fixed costs related

image text in transcribed
image text in transcribed
Gelb Company currently manufactures 42,000 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 $69,000 per year, and allocated fixed costs are $76,500 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 $3.70 per unit. Calculate the total incremental cost of making 42,000 units and buying 42,000 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 42,000 units. (Round "variable cost per unit" answers to Incremental Costs to Make Relevant Amount per Unit Relevant Fixed Costs Total Relevant Costs Variable cost per unit Fixed manufacturing costs Total incremental cost to make $ 0 Costs to Buy > Gelb Company currently manufactures 42,000 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 $69,000 per year, and allocated fixed costs are $76,500 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 $3.70 per unit. Calculate the total incremental cost of making 42,000 units and buying 42,000 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 buying 42,000 units. (Round "purchase price per unit" answers Incremental Costs to Buy Rolevant Relevant Amount per Fbxed Costs Unit Purchase price per unit Total incremental cost to buy Total Relevant Costs Costs to Make Outside Supplier >

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

Reflection On The Adaptation Of International Auditing Standards To SMEs

Authors: Mohamed Hedi Mzah

1st Edition

6204256882, 978-6204256887

More Books

Students also viewed these Accounting questions

Question

a. Describe the encounter. What made it intercultural?

Answered: 1 week ago