Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I would like help with these two questions, 1. what would be the amount saved if they continued to buy instead of making it. With

image text in transcribed

I would like help with these two questions, 1. what would be the amount saved if they continued to buy instead of making it. With question 2 I would like help finding the amount saved if they make the part instead of buying it.

image text in transcribedimage text in transcribed
X Company currently buys a part from supplier for $12.54 per unit but is considering making the part itself next year. This year, they purchased 3,200 units of this part; next year, they think they will need 3,500 units. Estimated costs to make the part are: Per-Unit Total Direct materials $3.25 $10,400 Direct labor 4.27 13,664 Variable overhead 2.70 8,640 Fixed overhead 4.30 13,?60 Total $14.52 $46,454 of the estimated xed overhead, $6,192 are common costs that would be allocated to the part; the rest would be additional fixed overhead costs. I Company currently rents unused factory space for $2,200: it will have to use this space to make the part. If): Company continues to buy the part instead of making it, it will save Submit Answer Tries {ifs X Company currently makes a part and is oonsidering buying it next year from a company that has offered to supply it for $15.33 per unit. This year, total costs to produce 59,000 units were: Direct materials $330,400 Direct labor 259,500 Overhead 336,300 Of the overhead costs, $70,800 were Fixed, and $50,268 of these fixed overhead costs are unavoidable even if it Company buys the part. Production next year is not expected to change. Ifx Company continues to make the part instead of buying it, it will save Submit Answer Tries 0:5

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

Financial Accounting

Authors: David Spiceland, Wayne M. Thomas, Don Herrmann

5th edition

1259914895, 978-1259914898

More Books

Students also viewed these Accounting questions