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Part U67 is used in one of Broce Corporation's products. The companys Accounting Departinent reports the following costs of producing the 14,700 units of the
Part U67 is used in one of Broce Corporation's products. The companys Accounting Departinent reports the following costs of producing the 14,700 units of the part that are needed every year. An outside supplier has offered to make the pait and sel it to the company for $20,00 each if this offer is accepted, the supervisor's salary and all of the vallable costs, including direct labor, can be avoided, The speclal equipment used to mako the part was putctased many years ago and has no salvacge value of other use. The allocated genetal owechead represents foved costs of the entire compary. If the outside suppliens offer were accepted, only $20700 of these allocated general ovethead costs wocild be awolded. Required: a. Prepare o report that shows the francial impact of buying port U6/ from the supplier rattier than continuing to make it inside the company b. Which altemative should the company choose
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