Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 2 - make or buy decision: All I'm Saying Corporation makes 45,000 units per year of a part (smart phone screens) it uses in

image text in transcribed
Question 2 - make or buy decision: All I'm Saying Corporation makes 45,000 units per year of a part (smart phone screens) it uses in the products it manufactures (smart phones). The unit product cost of this part is computed as follows: Direct materials $10.95 Direct labor 18.00 Variable manufacturing overhead 6.80 Fixed manufacturing overhead 12.00 Unit product cost $47.75 An outside supplier has offered to sell the company all of these parts it needs for $46.00 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $55,000 per year. If the part were purchased from the outside supplier, all of the variable costs, including direct labor cost of the part, would be avoided. However, $4.00 of the fixed manufacturing overhead cost being applied ACCY 201 - Friday Discussion Homework #9 - 12 points Spring2020 Deadline: you must submit this assignment electronically via Connect using the submission link I have provided in the module by 1159pm, Sunday 4/12. Make sure your name, your TA's name, and your discussion section time are clearly indicated on your submission to ensure you receive credit. to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be reallocated to the company's remaining products. What is the financial advantage / (disadvantage) of purchasing the part from the outside supplier rather than making it

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

Crash Course Medical Research Audit And Teaching The Essentials For Career Success

Authors: Amit Kaura MSc BSc MB ChB MRCP AFHEA AMInstLM, Darrel Francis, Shreelata T Datta MD MRCOG LLM MBBS BSc, Philip Xiu MA MB BChir MRCP MRCGP MScClinEd FHEA MAcadMEd RCPathME

2nd Edition

0702073784, 978-0702073786

Students also viewed these Accounting questions

Question

Make your illustrations vivid and specific.

Answered: 1 week ago