Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hanson, Inc. makes 1,000 units per year of a part called a prositron for use in one of its products. Data concerning the unit production

image text in transcribed
Hanson, Inc. makes 1,000 units per year of a part called a prositron for use in one of its products. Data concerning the unit production costs of the prositron follow: Direct materials Direct labor $354.1 $86.66 $51.96 $502.85 Variable manufacturing overhead Fixed manufacturing overhead An outside supplier has offered to sell Hanson, Inc. all of the prositrons it requires. If Hanson, Inc. decided to discontinue making the prositrons, 22% of the above fixed manufacturing overhead costs could be avoided. Assume that Hanson, Inc., could use the facilities presently devoted to production of the prositrons to expand production of negatrons that would yield an additional contribution margin of $51,000 annually. What is the maximum price per unit Hanson, Inc. should be willing to pay the outside supplier for prositrons? Round your final answer to two decimal places. Ignore the dollar sign

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

More Books

Students also viewed these Accounting questions

Question

Persuasive Speaking Organizing Patterns in Persuasive Speaking?

Answered: 1 week ago