Main Menu Contents Grades Chat Course Contents LON-CAPA PROBLEMS [ MODULE PROBLEM # 4 [ MAKE OR BUY DECISION ... Timer Notes Evaluate Feedback Print Info Elena Martinez is a managerial accountant at Palbec Corporation. Palbec is under Intense cost competition, and Martinez was asked to evaluate whether Palbec should continue to manufacture part MT-RF or purchase it from Marley Company in 2022. Marley had submitted a bid to supply the 38,000 MT-RF units that Paibec needs for 2022 at a price of $18.60 each. From 2021 plant records and interviews with Janice Liu, the plant manager, Martinez gathered the following information regarding Paibec's costs to manufacture 35,000 units of MT-RF in 2021: Liu also told her that: Direct materials Direct labor Plant space rental [fixed] Equipment lease [Fixed] Other overhead Variable Fixed Total $224,000 168,000 89,000 38,000 119,700 146,300 $785,000 if MT-RF was not purchased from Marley, direct material and direct labor costs per unit were more likely to be higher in 2022 by 6% and 4%, respectively, if MT-RF was purchased from Marley, $10,000 of the fixed overhead costs could be saved. if MT-RF was purchased from Marley, plant space will not have to be rented, and equipment will not have to be leased, but it will cost $9,500 and $5,000, respectively, to terminate the two contracts. Martinez estimated that 38,000 units of MT-RF would be needed in 2022. REQUIRED [ROUND ALL VARIABLE COSTS PER UNIT TO TWO DECIMAL PLACES.] If MT-RF was purchased from Marley in 2022, what would be the effect on Paibec's profits? [Note: if the buy costs are less than the make costs, enter the difference as a positive number; if the make costs are less than the buy costs, enter the difference as a negative number.] Submit Answer Tries 0/5 Threaded View Chronological View Other Views ... Export NEW Total Points - 8 vs. 10? Anonymous 1 Reply (Tue Feb 22 01:27:45 am 2022 (EST)) My general preferences on what is marked as NEW Mark NEW posts no longer new