Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Help Save & Exit Submit Han Products manufactures 35,000 units of part S-6 each year for use on its production line. At this level of

Help Save & Exit Submit Han Products manufactures 35,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part 5-6 is as follows: Check my work Direct materials Direct labour Variable overhead Fixed overhead Total cost per part $4.00 10.00 3.00 9.30 $20.30 An outside supplier has offered to sell 31,000 units of part 5-6 each year to Han Products for $23.50 per part. If Han Products accepts this offer, the facilities now being used to manufacture part 5-6 could be rented to another company at an annual rental of $88,000 However, Han Products has determined that 30% of the foxed overhead being applied to part S-6 will be avoided if part 5-6 purchased from the outside supplier Required: 1. What is the net dollar advantage or disadvantage of accepting the outside supplier's offer? (Round "Total costs" and final answer to the nearest whole dollar amount.) Net dollar disadvantage < Prev 34 Next > ENG 8:30 PAI 3 06 Do Prin ferences Required: Check my work 1. What is the net dollar advantage or disadvantage of accepting the outside supplier's offer? (Round "Total costs" and final answer to the nearest whole dollar amount.) Net dollar disadvantage 2. What is the annual rental value at which the company will be indifferent between the two options? (Round "Total costs" and final answer to the nearest whole dollar amount.) Pusual suntal value Q 119,000 8:30 P 2012-04-07

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

Vba Advanced Advanced Techniques For Finance Pros

Authors: Hayden Van Der Post

1st Edition

979-8864994818

More Books

Students also viewed these Accounting questions