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o in Lwasaki Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 13,000
o in Lwasaki Inc. is considering whether to continue to make a component or to buy it from an outside supplier. The company uses 13,000 of the components each year. The unit product cost is given as follows: Direct materials S8.80 Direct labor 5.50 Variable manufacturing overhead ..1.90 Fixed manufacturing/overhead... 2.60 Unit product cost $19.50 Assume that direct labot is a variable cost. Of the fixed manufacturing overhead. 30% is avoidable if the component were bought from the outside supplier. Making the components uses a machine the can be used on another product that has a contribution margin of $2,60 per unit. When deciding whether to make of buy the component, what cost of making the component should be compared of the price of buying the component? iwe The annual depreciation expense is $9,000. The payback period is: A) 2.50 years. B) 3.00 years. 4.25 years 3.50 years. yer investut us, 1 ACC-inflow 18000 533000 None of the above. + inflow 18000 IS, 9,- 6,- 2 3 4 + 481- Sli [ Brandon Company is considering the purchase of a new machine for $45.000. Predicted as cash inflows from this investment are $18,000, $15.000 $9,000, $6,000 and $3.000 for years through
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