Part U67 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. Per Unit Direct materials Direct 1abor $3.50 $ 4.20 S7.20 Variable overhead Supervisor nalary Depreciation of apecial equipment Allocated general overhend $7.90 $8.50 $5.50 An outside supplier has offered to make the part and sell it to the company for $31.00 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 U67 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 Required B Prepare a report that shows the financial impact of buying part U67 from the supplier rather than continuing to make it inside the company. Required: a. Prepare a report that shows the financial impact of buying part U67 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 B Required A Prepare a report that shows the financial impact of buying part U67 from the supplier rather than continuing to make it inside the company. Buy Make Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Outside purchase price Total cost Required B salary and all of the variable costs, including direct labor, can be avoided. Ihe 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 U67 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 B Required A Which alternative should the company choose? the part. The total cost of the "make" altemative is Therefore, the company should
