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Gilberto Company currently manufactures 74,000 units per year of one of its crucial parts. Variable costs are $240 per unit, fixed costs related to making
Gilberto Company currently manufactures 74,000 units per year of one of its crucial parts. Variable costs are $240 per unit, fixed costs related to making this part are $84.000 per year, and allocated fixed costs are $71000 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 $3.65 per unit guaranteed for a three year period. Calculate the total incremental cost of making 74,000 and buying 74.000 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 74,000 units. (Round cost per unit answers to 2 decimal places) Incremental Conta to Make Relevant Amount per Relevant Fixed Total Relevant Unit Costs Costs Vanable cost per unit Fixed manutacturing costs Total incremental cost to make $ 0 Costs to Buy > 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 74,000 units. (Round cost per unit answers to 2 decimal places.) Incremental Costs to Buy Relevant Amount per Relevant Fixed Total Relevant Unit Costs Costs Purchase price per unit Total incremental cost to buy 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 Should Gilberto make the part or purchase it from the outside supplier?
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