Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

mpany makes 9,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is

image text in transcribed

mpany makes 9,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is ed as follows: materials labor le manufacturing overhead manufacturing overhead roduct cost $12.40 20.00 2.20 10.10 $44.70 e supplier has offered to sell the company all of these parts it needs for $41.50 a unit. If the company accepts this offer, the how being used to make the part could be used to make more units of a product that is in high demand. The additional on margin on this other product would be $54,000 per year. were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $6.00 of the ufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. manufacturing overhead cost would be applied to the company's remaining products. ch of the unit product cost of $44.70 is relevant in the decision of whether to make or buy the part? (Round "Per Unit" to 2 aces.) the financial advantage (disadvantage) of purchasing the part rather than making it? he maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits all 9,000 units required each year? (Round "Per Unit" to 2 decimal places.) manufacturing cost i per unit acceptable purchase price per unit

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: Robert Libby, Patricia Libby, Daniel Short

8th edition

78025559, 978-0078025556

More Books

Students also viewed these Accounting questions