Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gilberto Company currently manufactures 60,000 units per year of one of its crucial parts. Variable costs are $2.30 per unit, fixed costs related to making

image text in transcribed
image text in transcribed
Gilberto Company currently manufactures 60,000 units per year of one of its crucial parts. Variable costs are $2.30 per unit, fixed costs related to making this part are $60,000 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 $3.50 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 60,000 and buying 60,000 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 60,000 units. (Round cost per unit answer to 2 decimal places.) Incremental Costs to Make Relevant Amount per Unit Relevant fixed costs Total relevant costs riable cost per unit ixed manufacturing costs 2.30 3.00 138,000 60,000 Total incremental cost to make 198,000 K Costs to Male Costs to Buy Calculate the total incremental cost of buying 60,000 units. (Round cost per unit answer to 2 decimal places.) Incremental Costs to Buy Relevant Amount per Unit Relevant fixed costs Total relevant costs Purchase price per unit Total incremental cost to buy 0 KCosts 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_2

Step: 3

blur-text-image_3

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

Intermediate Accounting 2007 FASB Update Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

12th Edition

0470128763, 978-0470128763

More Books

Students also viewed these Accounting questions

Question

What cultural differences might be involved in this scenario?

Answered: 1 week ago

Question

Recognize the various roles and competencies of an HRD professional

Answered: 1 week ago

Question

Define human resource development (HRD)

Answered: 1 week ago