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Please help me complete this, I have been struggling for a while and mainly I need the answer. Give Kudos! Kirsten Corporation makes 100,000 units
Please help me complete this, I have been struggling for a while and mainly I need the answer. Give Kudos!
Kirsten Corporation makes 100,000 units per year of a part called a B345 $ 0.15 gasket for use in one of its products. Data concerning the unit production costs of the B345 gasket follow:Direct materials Direct labor 0.10 Variable manufacturing overhead 0.13 Fixed manufacturing overhead 0.24 Total manufacturing cost per unit $ 0.62 An outside supplier has offered to sell Kirsten Corporation all of the B345 gaskets it requires. If Kirsten Corporation decided to discontinue making the B345 gaskets, 25% of the above fixed manufacturing overhead costs could be avoided. Assume that direct labor is a variable cost. Required:a. Assume Kirsten Corporation has no alternative use for the facilities presently devoted to production of the B345 gaskets. If the outside supplier offers to sell the gaskets for $0.46 each, should Kirsten Corporation accept the offer? Fully support your answer with appropriate calculations. 4 POINTS Step by Step Solution
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