Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Make Company has traditionally manufactured a number of different standard machine parts. It is now exploring an outsourcing decision for several of the parts that

image text in transcribed

image text in transcribed

Make Company has traditionally manufactured a number of different standard machine parts. It is now exploring an outsourcing decision for several of the parts that it currently produces. Cost information for one such machine part is given below Variable cost/unit Fixed manufacturing costs (total) Allocated corporate overhead Unit product cost (based on 500 units) 30.00 5,200.00 6,990.00 $ 52.58 Fifty percent of the fixed manufacturing costs are directly traceable to this specific machine part and therefore avoidable An outs supplier will sell the part at a price of $60 per unit if 500 units are purchased. Required: Prepare an analysis whether We Make should continue to manufacture this machine part or whether it should purchase it from outside supplier (Negative amounts should be indicated by a minus sign. Round "Per Unit" to 2 decimal places.) 500 hits Make Buy Per Unit Differenco Purchase Variable cost Fixed manufacturing overhead Common costs Total costs Per Unit Buy Purchase Variable cost Fixed manufacturing overhead Common costs Total costs Should the company make or buy? O Make O Buy

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

Managerial Accounting

Authors: Kulp, Susan, Dragoo, Amie, Hartgraves, Al L, Morse Wayne J.

9th Edition

1618533622, 9781618533623

More Books

Students also viewed these Accounting questions

Question

13. What are two mechanisms by which CCK increases satiety?

Answered: 1 week ago

Question

What are the three steps to changing bad habits? (p. 224)

Answered: 1 week ago

Question

4 What is the recruitment phase?

Answered: 1 week ago