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please help me Part 043 is used in one of Scheetz Corporation's products. The company's Accounting Department reports the following costs of producing the 16,700
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Part 043 is used in one of Scheetz Corporation's products. The company's Accounting Department reports the following costs of producing the 16,700 units of the part that are needed every year. Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Per Unit 53.90 $4.60 $7.60 $8.30 $8.90 $5.90 121 An outside supplier has offered to make the part and sell it to the company for $32.00 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 $22,700 of these allocated general overhead costs would be avoided, Required: a. Prepare a report that shows the effect on the company's total net operating income of buying part 043 from the supplier rather than continuing to make it inside the company (Input the amount as a positive value.) Buy Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Alocated general overhead Outside purchase price Make $ 65,130 76,820 126,920 138,610 148,630 98,530 148,630 75,830 534.400 $ $ 654,640 758.860 Total cost company. If the outside supplier's offer were accepted, only $22,700 of these allocated general overhead costs would be avoided. Required: a. Prepare a report that shows the effect on the company's total net operating income of buying part 043 from the supplier rather than continuing to make it inside the company. (Input the amount as a positive value.) Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Outside purchase price Make Buy $ 65,130 76,820 126,920 138,610 148.630 148,630 98.530 75,830 $ 534 400 $ $ 654,640 758 860 Total cost b. Which alternative should the company choose? Make O Buy Step by Step Solution
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