Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer question attached 1. (25 pts) Elly Industries is a multiproduct company that currently manufactures 30,000 units of Part MR24 each month for use

Please answer question attachedimage text in transcribed

1. (25 pts) Elly Industries is a multiproduct company that currently manufactures 30,000 units of Part MR24 each month for use in production. The facilities now being used to produce Part MR24 have a fixed monthly cost of $150,000 and a capacity to produce 84,000 units per month. If Elly were to buy Part MR24 from an outside supplier, the facilities would be idle, but its fixed costs would continue at 40 percent of its present amount. The variable production costs of Part MR24 are $11 per unit. Required: a. If Elly Industries continues to use 30,000 units of Part MR24 each month, it would realize a net benefit by purchasing Part MR24 from an outside supplier only if the supplier's unit price is less than how much? b. If Elly Industries can obtain Part MR24 from an outside supplier at a unit purchase price of $12.875, what is the monthly usage at which it will be indifferent between purchasing and making Part MR24

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

Comparative international accounting

Authors: Christopher nobes, Robert parker

9th Edition

273703579, 978-0273703570

More Books

Students also viewed these Accounting questions