Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

someone solve this ?? Each year, Giada Company produces 22,000 units of a component part used in tablet computers. An outside supplier has offered to

someone solve this ??

image text in transcribedimage text in transcribed

Each year, Giada Company produces 22,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $1.21. The unit cost is: Direct materials $0.71 Direct labor 0.27 Variable overhead 0.1 Fixed overhead 2.15 Total unit cost $3.23 Required: 1. What are the alternatives for Giada Company? Make the part in house or buy the part externally 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. Direct materials, direct labor and variable overhead List the relevant cost(s) of external purchase. Purchase price 3. Which alternative is more cost effective and by how much? Making the part in house by $ 4. What if $19,960 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? Buying the part from the external supplier by $ Jan Booth is considering investing in either a storage facility or a car wash facility. Both projects have a five-year life and require an investment of $370,000. The cash flow patterns for each project are given below. Storage facility: Even cash flows of $130,000 per year Car wash: $112,800, $143,000, $61,000, $126,000, and $90,000 Required: 1. Calculate the payback period for the storage facility (even cash flows). Round your answer to one decimal place. 2.8 years 2. Calculate the payback period for the car wash facility (uneven cash flows). Round your answer to three decimal places. 35 X years

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

Financial Accounting

Authors: Strayer University

1st Edition

ISBN: 0470603526, 978-0470603529

More Books

Students also viewed these Accounting questions