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I am mostly confused how to set everyhting up Gilberto Company currently manufactures one of its crucial parts at a cost of $4.30 per unit.
I am mostly confused how to set everyhting up
Gilberto Company currently manufactures one of its crucial parts at a cost of $4.30 per unit. This cost is based on a normal production rate of 80,000 units per year. Variable costs are $2.80 per unit, fixed costs related to making this part are $80,000 per year, and allocated fixed costs are $40,000 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 $3.50 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 80,000 units. Incremental costs to make Relevant Amount per Unit Relevant fixed costs Total relevant costs Total incremental cost to make ____________Step by Step Solution
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