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Part U67 is used In one of Broce Corporation's products. The company's Accounting Department reports the following costs of producing the 15,900 units of the
Part U67 is used In one of Broce Corporation's products. The company's Accounting Department reports the following costs of producing the 15,900 units of the part that are needed every year. Direct materials Direct labor ariable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Per Unit $ 2.88 $3.88 $6.60 $7.18 $ 8.28 $5.38 An outslde supplier has offered to make the part and sell It to the company for $30.00 each. If thls offer is accepted, the supervisor's galary and all of the varlable costs, Including direct labor, can be avolded. The speclal equipment used to make the part was purchased many years ago and has no salvage value or other use. The located general overhead represents fixed costs of the entire company. If the outside suppliers offer were accepted, only $21,900 of these allocated general overhead costs would be avolded. Required: a. Prepare a report that shows the financial Impact of buying part U67 from the suppler rather than continulng to make It Inslde 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. Direct materials Direct labor Varia ble overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Outside purchase price Total cost
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