Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I keep getting the wrong answer. i keep getting 6.60 for the make on part 1 and 97,680 for the buy not sure what i'm
I keep getting the wrong answer. i keep getting 6.60 for the make on part 1 and 97,680 for the buy not sure what i'm doing wrong. Thanks for the help Climate-Control, Inc., manufactures a variety of heating and air-conditioning units. The company is currently manufacturing all of its own component parts. An outside supplier has offered to sell a thermostat to Climate-Control for $33 per unit. To evaluate this offer, Climate-Control, Inc., has gathered the following information relating to its own cost of producing the thermostat internally: Per Unit 14,800 Units per year Direct materials $ 9 $ 133,200 Direct labor 11 162,800 Variable manufacturing overhead 4 59,200 Fixed manufacturing overhead, traceable 6* 88,800 Fixed manufacturing overhead, common, but allocated 13 192,400 Total cost $ 43 $ 636,400 *40% supervisory salaries; 60% depreciation of special equipment (no resale value). Required: 1a. Assuming that the company has no alternative use for the facilities now being used to produce the thermostat, compute the total cost of making and buying the parts. (Round your Fixed manufacturing overhead per unit rate to two decimals and your final answers to the nearest dollar amount.Omit the "$" sign in your response.) Make Buy Total relevant cost (14,800 units) $ $ 1b. Should the outside supplier's offer be accepted? Accept Reject 2a. Suppose that if the thermostats were purchased, Climate-Control, Inc., could use the freed capacity to launch a new product. The segment margin of the new product would be $105,680 per year. Compute the total cost of making and buying the parts. (Round your Fixed manufacturing overhead per unit rate to two decimals and your final answers to the nearest dollar amount. Omit the "$" sign in your response.) Make Buy Total relevant cost (14,800 units) $ $
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