Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Los Principales Corp makes bronze ingots it then uses to mold into decorative vases. Following data are available: Ingots produced Direct materials Direct labor Variable

image text in transcribed
Los Principales Corp makes bronze ingots it then uses to mold into decorative vases. Following data are available: Ingots produced Direct materials Direct labor Variable MOH Fixed MOH Unit product cost: 10.000 $ 13.20 $ 20.80 3.00 $10.90 $ 47.90 An outside metallurgic company offered to sell Los Principales all the bronze ingots it needs for $42.30. If Los Principal ingots from the outside supplier it can use the facilities to manufacture a different product earning additional contribu margin of $39.000. All the product costs, except for $6.40 of Fixed MOH are avoidable if the ingots were purchased for outside company. a. How much of the unit product cost is relevant in the decision of whether to make or buy the part? enter your answer with two decimal places (e.g. 20.23) b. What is the net total dollar advantage (disadvantage) of purchasing the part rather than making it? enter your answer as a whole number (e.g. 2023) c. What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the commits to supplying all the required units? enter your answer with two decimal places (e.g. 20.23)

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_2

Step: 3

blur-text-image_3

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

Auditing and Assurance services an integrated approach

Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley

14th Edition

133081605, 132575957, 9780133081602, 978-0132575959

More Books

Students also viewed these Accounting questions

Question

3. How does nonverbal communication express cultural values?

Answered: 1 week ago

Question

2. What types of nonverbal behavior have scholars identifi ed?

Answered: 1 week ago