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Help please Haver Company cufrently pays an outside supplier $49 per unit for a part for one of its products. Haver is considering two aiternative
Help please
Haver Company cufrently pays an outside supplier $49 per unit for a part for one of its products. Haver is considering two aiternative methods of making the part. Method 1 for making the part would require direct materials of $22 per unit, direct fabor of $25 per unit, and incremental overhead of $3 per unit Method 2 for making the part would require direct materials of $22 per unit, direct labor of $19 per unit, and incremental overhead of $7 per unit. Required: 1. Compute the cost per unit for each alternative method of making the part. 2. Should Hover make or buy the part? If Haver makes the part, which production method should it use? Hip Manufacturing produces denim clothing. This year it produced 3.240 denim jackets at a cost of $97,200. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets: 1. Jackets can be sold as scrap to a secondhand clothing shop for $19,440 2. Jackets can be disassembled at a cost of $6,480 and sold to a recycler for $38,880. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $110.160, and the jackets can then be sold for $145.800. Required: (7) Compute the income for each alternative. (2) Which altemative should be chosen? JART manufactures and selis underwater markers. Its contribution margin income statement follows. A potential customer offers to buy 51,000 units for $3.00 each. These sales would not affect the company's saies through its normal channets. Detains about the special offer follow. - Direct materials cost per unit and variable overhead cost per unit would not change. - Direct labor cost per unit would be $053 bocause the offer would reguire overtime pay. - Accepting the offer Would reguire incremental fixed general and administrative costs of $5,100 - Accepting the offer would require no incremental fixed overthead costs. Requifed: 1. Compure-income from the special ofter. 2. Should the company accept of reject the special offer Step by Step Solution
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