Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gilberto Company currently manufactures 50,000 units per year of one of its crucial parts. Variable costs are $1.50 per unit, fixed costs related to making

image text in transcribed
image text in transcribed
image text in transcribed
Gilberto Company currently manufactures 50,000 units per year of one of its crucial parts. Variable costs are $1.50 per unit, fixed costs related to making this part are $50,000 per year, and allocated fixed costs are $45,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $2.70 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 50,000 and buying 50,000 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 Buy Outside Supplier Calculate the total incremental cost of making 50,000 units. (Round cost per unit answer to 2 decimal places.) Incremental Costs to Make Relevant Relevant fixed Amount per Unit costs Total relevant costs Total incremental cost to make unit guaranteed for a three-year period. Calculate the total incremental cost of making 50,000 and buying 50,000 units. Should the comp 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 Buy Outside Supplier Calculate the total incremental cost of buying 50,000 units. (Round cost per unit answer to 2 decimal Incremental Costs to Buy Relevant Relevant Amount per Unit fixed costs Total relevant costs Total incremental cost to buy + Gilberto Company currently manufactures 50,000 units per year of one of its crucial parts. Variable related to making this part are $50,000 per year, and allocated fixed costs are $45,000 per year. whether the company makes or buys the part. Gilberto is considering buying the part from a suppli unit guaranteed for a three-year period. Calculate the total incremental cost of making 50,000 and buying 50,000 units. Should the compa 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 Buy Outside Supplier Should the company continue to manufacture the part, or should it buy the part from the outside suppl Should Gilberto make the part or purchase it from the outside supplier? (Costs to Buy 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

Plant Auditing A Powerful Tool For Improving Metallurgical Plant Performance

Authors: Deepak Malhotra

1st Edition

0873354125, 978-0873354127

More Books

Students also viewed these Accounting questions