Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 61,000 units of RX5 follows. Direct
Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 61,000 units of RX5 follows.
Direct materials | $ | 5.00 | |
Direct labor | 9.00 | ||
Overhead | 10.00 | ||
Total costs per unit | $ | 24.00 | |
Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the 61,000 units of RX5 for $20.00 per unit. Required: 1. Determine the total incremental cost of making 61,000 units of RX5. 2. Determine the total incremental cost of buying 61,000 units of RX5. 3. Should the company make or buy RX5?
Required 1 Required 2 Required 3 Determine the total incremental cost of making 61,000 units of RX5. Incremental cost of making RX5 Making the units Total incremental cost of making 61,000 units Required 1 Required 2 Required 3 Determine the total incremental cost of buying 61,000 units of RX5. Incremental cost of buying RX5 Buying the units Total incremental cost of buying 61,000 units Required 1 Required 2 Required 3 Should the company make or buy RX5? Should the company make or buy RX5?Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started