Question
Q#3 the estimated costs of producing 6,000 units of a component are: Per Unit Direct Material $10 Direct Labor 8 Applied Variable Factory Overhead 9
| Q#3 the estimated costs of producing 6,000 units of a component are:
| Per Unit | |
| Direct Material | $10 | |
| Direct Labor | 8 | |
| Applied Variable Factory Overhead | 9 | |
| Applied Fixed Factory Overhead | 12 | |
| $1.5 per direct labor dollar |
| |
|
| $39 |
The same component can be purchased from market at a price of $29 per unit. If the component is purchased from market, 25% of the fixed factory overhead will be saved.
Should the component be purchased from the market?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
