Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help with breaking down the relevant costs Waterways has discovered that a small fitting it now manufactures at a unit cost of $1.00 could

need help with breaking down the relevant costs
image text in transcribed
image text in transcribed
Waterways has discovered that a small fitting it now manufactures at a unit cost of $1.00 could be bought elsewhere for $0.82 per unit. Waterways has unit fixed manufacturing costs of $0.20 that cannot be eliminated by buying this unit. Waterways needs 460.000 of these units each year. If Waterways decides to buy rather than produce the small fitting, it can devote the machinery and labor to making a timing unit it now buys from another company. Waterways uses approximately 500 of these units each year. The cost of the unit is 512.66 . To aid in the production of this unit, Waterways would need to purchase a new machine at a cost of $2.345, and the unit cost of producing the units would be $9.90 Would it be wise for Waterways to buy the fitting and manufacture the timing unit? The company should small fittings and the timing units

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

Expert Systems And Artificial Intelligence In Internal Auditing

Authors: Daniel E. O'Leary, Paul R. Watkins

1st Edition

1558760865, 978-1558760868

More Books

Students also viewed these Accounting questions

Question

What is a verb?

Answered: 1 week ago