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Mefarlain Corporation is presently making part U98 that is used in one of its products. A total of 16.000 units of this pat are produced
Mefarlain Corporation is presently making part U98 that is used in one of its products. A total of 16.000 units of this pat are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: An outside supplier has offered to produce and sell the port to the company for $17.40 each. If this offer is accepted, the supervisor's saliry and all of the variable costs, including direct labor, can be avoided. The special equlpment used to make the gart was purchssed many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced intemally. In addition to the facts given above, assume that the space used to produce part u98 could be used to make more of one of the company's other products, generating an additional segment margin of $33,400 per year for that product. What would be the financlal advantage disadvantage) of buying part U98 from the outside supplier and using the freed space to make more of the other product? Feldpausch Corporation has provided the following data from its activity-based costing systent: The company makes 1,080 units of product W268 a year, requiring a total of 2,010 machine-hours, 13t orders, and 35 inspection hours per yeat The product's direct materials cost is $58.32 per unit and its direct labor cost is $17.36 per unit. The product seils for $129.50 per unit According to the activity-baged costing system, the product margin for product W269 is: Note: Round your intermediate calcutations and final answers to 2 decimal places. Multiple Cholce 4.14.180.11
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