Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Recher Corporation uses part Q89 in one of its products. The company's Accounting Department reports the following costs of producing the 7,800 units of the

image text in transcribed
Recher Corporation uses part Q89 in one of its products. The company's Accounting Department reports the following costs of producing the 7,800 units of the part that are needed every year An outside supplier has offered to make the part and sell it to the company for $2100 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 purchosed 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 $4,700 of these allocated general overhead costs would be avoided. In addition, the space used to produce part Q89 could be used to make more of one of the company's other products, generating an additional segment margin of $14,300 per year for that product. Required: a. Prepore a report that shows the financial impact of buying part Q89 from the supplier rother 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. Prepare a report that shows the financal impact of buving part Q89 from the supplier rather than continuing to make it intide the company

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_2

Step: 3

blur-text-image_3

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

Financial and Managerial Accounting the basis for business decisions

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

16th edition

0077664078, 978-0077664077, 78111048, 978-0078111044

More Books

Students also viewed these Accounting questions

Question

Define Decision making

Answered: 1 week ago

Question

What are the major social responsibilities of business managers ?

Answered: 1 week ago

Question

What are the skills of management ?

Answered: 1 week ago

Question

e. What are notable achievements of the group?

Answered: 1 week ago