Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

per Year Assume a company is considering buying 10,000 units of a component part rather than making them. A supplier has agreed to sell the

image text in transcribed
image text in transcribed
per Year Assume a company is considering buying 10,000 units of a component part rather than making them. A supplier has agreed to sell the company 10.00 units for a price of $40 per unit. The company's accounting system reports the following costs of making the part: 10,000 Units Per Unit Direct materials $180,000 Direct labor 12 120,000 Variable manufacturing overhead 220,000 Fixed manufacturing overhead, traceable 80,000 Fixed manufacturing overhead, allocated 40,000 Total cost $44 $440,000 $18 8 4 One-half of the traceable fixed manufacturing overhead relates to supervisory salaries and the remainder relates to depreciation of equipment with salvage value. If the company chooses to buy this component part from a supplier, then the supervisor who oversees its production would be discharged. If the company begins buying the part from a supplier, it can use freed up capacity to produce and sell 2,300 more units of anothe that earns a contribution margin per unit of $7.25. What is the financial advantage (disadvantage) of buying 10,000 units from the supplier? prod Multiple Choice $160,000) ${23.325) One-half of the traceable fixed manufacturing overhead relates to supervisory salaries and the remainder relates to depreciation of equipment with no salvage value. If the company chooses to buy this component part from a supplier, then the supervisor who oversees its production would be discharged. If the company begins buying the part from a supplier, it can use freed up capacity to produce and sell 2.300 more units of another product that earns a contribution margin per unit of $7.25. What is the financial advantage (disadvantage) of buying 10,000 units from the supplier? Multiple Choice $160,000) O $123.325 $132.300) $(3,325)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting, Enhanced

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

11th Edition

1119594596, 9781119594598

More Books

Students also viewed these Accounting questions

Question

=+3. How will you measure action objective?

Answered: 1 week ago

Question

=+2. What research methodologies would be most effective?

Answered: 1 week ago

Question

=+ Focus groups with representative publics. Which publics?

Answered: 1 week ago