Part U$67$ is used in one of Broce Corporation's products. The company's Accounting Department reports the following costs of Part U$67$ is used in one of Broce Corporation's products. The company's Accounting Department reports the following costs of

producing the $16,300$ units of the part that are needed every year.

An outside supplier has offered to make the part and sell it to the company for $$31\mathrm{.}00$ each. If this offer is accepted, the supervisor's

salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was

purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire

company. If the outside supplier's offer were accepted, only $$22,300$ of these allocated general overhead costs would be avoided.

Required:

a$.$ Prepare a report that shows the financial impact of buying part U$67$ from the supplier rather than continuing to make it inside the

company.

b$.$ Which alternative should the company choose?

Complete this question by entering your answers in the tabs below.

Required $A$

Which alternative should the company choose?

The total cost of the "make" alternative is

by

Therefore, the company should

the part.

producing the $16,300$ units of the part that are needed every year.Direct materials $ $3\mathrm{.}50$

Direct labor $ $$4\mathrm{.}20$

Variable overhead $ $ $7\mathrm{.}20$

Supervisor's salary $ $ $7\mathrm{.}90$

Depreciation of special equipment $ $ $8\mathrm{.}50$

Allocated general overheadAn outside supplier has offered to make the part and sell it to the company for $$31\mathrm{.}00$ each. If this offer is accepted, the supervisor's

salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was

purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire

company. If the outside supplier's offer were accepted, only $$22,300$ of these allocated general overhead costs would be avoided.

Required:

a$.$ Prepare a report that shows the financial impact of buying part U$67$ from the supplier rather than continuing to make it inside the

company.

b$.$ Which alternative should the company choose?

Complete this question by entering your answers in the tabs below.

Required A

Prepare a report that shows the financial impact of buying part U$67$ from the supplier rather than continuing to make it inside

the company.