Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please rework 1-3, none recieved full credit. 1 2. 3. Part O43 is used in one of Scheetz Corporation's products. The company's Accounting Department reports

Please rework 1-3, none recieved full credit.

1

image text in transcribed

2.image text in transcribed

3.image text in transcribed

Part O43 is used in one of Scheetz Corporation's products. The company's Accounting Department reports the following costs of producing the 16,900 units of the part that are needed every year. Per Unit $4.10 Direct materials $4.80 Direct labor Variable overhead $7.80 Supervisor's salary $8.50 Depreciation of special equipment $9.10 $6.10 Allocated general overhead An outside supplier has offered to make the part and sell it to the company for $34.00 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 $22,900 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 O43 from the supplier rather than continuing to make it inside the company. (Input the amount as a positive value. Omit the sign in your response.) Net operating income would be (Click to select) by b. Which alternative should the company choose? Make Buy

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

More Books

Students also viewed these Accounting questions

Question

Have roles been defined and assigned?

Answered: 1 week ago

Question

Describe a persuasive message.

Answered: 1 week ago

Question

Identify and use the five steps for conducting research.

Answered: 1 week ago

Question

List the goals of a persuasive message.

Answered: 1 week ago