Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gilberto Company currently manufactures 71,000 units per year of one of its crucial parts. Variable costs are $2.25 per unit, fixed costs related to making

image text in transcribedimage text in transcribedimage text in transcribed

Gilberto Company currently manufactures 71,000 units per year of one of its crucial parts. Variable costs are $2.25 per unit, fixed costs related to making this part are $81,000 per year, and allocated fixed costs are $68,000 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 71,000 and buying 71,000 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. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 71,000 units. (Round cost per unit answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Relevant Fixed Costs Total Relevant Unit Costs Total incremental cost to make 0 Gilberto Company currently manufactures 71,000 units per year of one of its crucial parts. Variable costs are $2.25 per unit, fixed costs related to making this part are $81,000 per year, and allocated fixed costs are $68,000 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 71,000 and buying 71,000 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. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of buying 71,000 units. (Round cost per unit answers to 2 decimal places.) Incremental Costs to Buy Relevant Amount Relevant Fixed Total Relevant Costs Costs per Unit Total incremental cost to buy $ 0 Gilberto Company currently manufactures 71,000 units per year of one of its crucial parts. Variable costs are $2.25 per unit, fixed costs related to making this part are $81,000 per year, and allocated fixed costs are $68,000 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 71,000 and buying 71,000 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. Outside Costs to Buy Costs to Make Supplier Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Should Gilberto make the part or purchase it from the outside supplier? 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

Financial Accounting

Authors: Jr. Belverd E. Needles, Marian Powers

9th Edition

0547070020, 978-0547070025

More Books

Students also viewed these Accounting questions

Question

Why wasnt it the cause of the strike?

Answered: 1 week ago

Question

What is the purpose of the staffing practice called Two-in-aBox?

Answered: 1 week ago

Question

What would you do?

Answered: 1 week ago