Answered step by step
Verified Expert Solution
Question
1 Approved Answer
question 13 Gelb Company currently manufactures 52,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed
question 13
Gelb Company currently manufactures 52,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $71,000 per year, and allocated fixed costs are $68,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making 52,000 units and buying 52,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 52,000 units. (Round "variable cost per unit" answers to 2 decimal places.) Relevant Fixed Costs Total Relevant Costs Incremental Costs to Make Relevant Amount per Unit Variable cost per unit Fixed manufacturing costs Total incremental cost to make Costs to Buy > Gelb Company currently manufactures 52,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $71,000 per year, and allocated fixed costs are $68,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making 52,000 units and buying 52,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of buying 52,000 units. (Round "purchase price per unit" answers to 2 decimal places.) Incremental Costs to Buy Relevant Relevant Total Relevant Amount per Unit Fixed Costs Costs Purchase price per unit Total incremental cost to buy Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started