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Gelb company manufactures 41,000 units per year of a key component for its manufacturing process. Gelb Company currently manufactures 41,000 units per year of a
Gelb company manufactures 41,000 units per year of a key component for its manufacturing process.
Gelb Company currently manufactures 41,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $83,000 per year, and allocated fixed costs are $81,500 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 $3.90 per unit. Calculate the total incremental cost of making 41,000 and buying 41,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? (Round "purchose price per unit" answer to 2 decimal places.) Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Supplier Outside Calculate the total incremental cost of making 41,000 units. (Round lvarlable cost per uniti answer to 2 decimal places.) Incremental Costs to Make Relevant Amount per Unit Relevant Total Relevant Fixed Costs Costs Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 41,000 units. (Round "variable cost per unit" answer to 2 decimal places.) Incremental Costs to Make Relevant Total Relevant Amount per Fixed Costs Costs Unit Total incremental cost to make Costs to Buy Complete this question by entering your answers in the tabs below. Outside Supplier Costs to Make Costs to Buy Calculate the total incremental cost of making 41,000 units. (Round "variable cost per unit" answer to 2 decimal places.) Incremental Costs to Buy Relevant Amount per Fixed Costs Relevant Total Relevant Costs Total incremental cost to buy Costs to Make Outside Supplier Calculate the total incremental cost of making 41,000 and buying 41,000 units. Should it continue to manufacture the should it buy this component from the outside supplier? (Round "purchase price per unit" answer to 2 decimal plac 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? Should Gelb make the part or purchase it from the outside supplier? K Costs to Buy Step by Step Solution
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