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The motor assembly is used in one of Greenwell Corporation's products. The company's Accounting Department reports the following costs of producing the 15,100 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 $2.00 $ 3.00 $5.80 $6.30 $ 7.40 $ 4.50 An outside supplier has offered to make the part and sell it to the company for $24.00 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 $21,100 of these allocated general overhead costs would be avoided. Required: a. Prepare a report that shows the financial impact of buying the motor assembly from the supplier rather than continuing to make it inside the company. b. Which alternative should the company choose? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a report that shows the financial impact of buying part 167 from the supplier rather than continuing to make it inside the company Make Buy Direct materials Direct labor Variable overhead Supervisor's salary An outside supplier has offered to make the part and sell it to the company for $24.00 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 $21,100 of these allocated general overhead costs would be avoided. Required: a. Prepare a report that shows the financial impact of buying the motor assembly from the supplier rather than continuing to make it inside the company b. Which alternative should the company choose? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a report that shows the financial impact of buying part 167 from the supplier rather than continuing to make it inside the company. Make Buy Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Outside purchase price Total cost Required A Required > An outside supplier has offered to make the part and sell it to the company for $24.00 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 $21,100 of these allocated general overhead costs would be avoided. Required: a. Prepare a report that shows the financial impact of buying the motor assembly from the supplier rather than continuing to make it inside the company. b. Which alternative should the company choose? Complete this question by entering your answers in the tabs below. Required A Required B Which alternative should the company choose? The total cost of the "make" alternative is Therefore, the company should the part
