Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gilberto Company currently manufactures 65,000 units per year of one of its crucial parts. Variable costs are $1.95 per unit, fixed costs related to making

Gilberto Company currently manufactures 65,000 units per year of one of its crucial parts. Variable costs are $1.95 per unit, fixed costs related to making this part are $75,000 per year, and allocated fixed costs are $62,000 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 $3.25 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 65,000 units. (Round cost per unit answer to 2 decimal places.) Calculate the total incremental cost of buying 65,000 units. (Round cost per unit answer to 2 decimal places.) Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Buy Make

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

ACCA Approved Study Text P7 Advanced Audit And Assurance

Authors: BPP

1st Edition

1472744349, 978-1472744340

More Books

Students also viewed these Accounting questions

Question

It can be physically harmful.

Answered: 1 week ago

Question

create a reaume as a grocery clerk ?

Answered: 1 week ago