Question
NEED HELP ON C-D The Martinez Company manufactures 4,600 units of a part that could be purchased from an outside supplier for $14 each. Martinez's
NEED HELP ON C-D
The Martinez Company manufactures 4,600 units of a part that could be purchased from an outside supplier for $14 each. Martinez's costs to manufacture each part are as follows:
Direct materials | $3 | ||
Direct labor | 2 | ||
Variable manufacturing overhead | 5 | ||
Fixed manufacturing overhead | 9 | ||
Total | $19 |
All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses.
(a-b)
Correct answer icon
Your answer is correct.
(a) Calculate relevant cost to make.
Relevent cost to make | $enter relevent cost to make in dollars per unit per unit |
(b) Should Martinez continue to manufacture the part?
select an option NoYes |
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Attempts: 1 of 3 used
(c-d)
(c) If Martinez could lease the manufacturing facilities to another company for $24,600 per year, what would be the net total cost to outsource production of the part?
Net cost to buy | $enter the net cost to buy in dollars |
(d) Should Martinez outsource production of the part given the opportunity to lease the facilities? select an option NoYes
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