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Pan U16 s used by Mcveen Corporat on to make one or its oducts. A total of 1 000 units af this pat are reduced
Pan U16 s used by Mcveen Corporat on to make one or its oducts. A total of 1 000 units af this pat are reduced and used e ery yea The co per s Accounting Departmentreports the follo ing costs of p od cin The pan at this level of activty Unit Diret matarials Direct labor 84.10 8.70 variabl nanu facturing $9,20 Sapar iAr' aalary $4.60 Depreciatian ot apacial aapmant allocated general $8.210 $3.00 An D ts dc suppler has offered o make the part and sel t to the company tor 29. a coch If this offer is acceptec tho supervisors salary and all of the va able costs, Includng the circct labor, can be ava ced hc sacdal cquipment used to make the rt was purchas d many years ogo and has no sa age velue or other use. The alocated gene el ovehead represents fied costs othe entire comper, none of wich would be evoided the pert were purchesed insteed ofproduced inernely, In acdition, the spece used ta meke pert M6 could be used to meke more of one of the compeny's ather praducts, gererating an addtional sagment margin of $31,0 per year for that araduct. The annual tinancial advantage (disadvantagc)far the company as a result af buying part U from the autside suppicr should be: Multiple Choice $172 900) $31OD0 $102.000 $24,100)
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