Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Stuck on this Waterways has discovered that a small fitting it now manufactures at a unlt cost of $1.00 could be bought elsewhere for $0.81

Stuck on this image text in transcribed
Waterways has discovered that a small fitting it now manufactures at a unlt cost of $1.00 could be bought elsewhere for $0.81 per unit. Waterways has unit fixed manufacturing costs of $0.20 that cannot be eliminated by buying this unit. Waterways needs 446,000 of these units each year. If Waterways decides to buy rather than produce the small fitting, It can devote the machinery and labor to making a timing unit it now buys from another company. Waterways uses approximately 400 of these units each year. The cost of the unit is $13.28. To aid in the production of this unit, Waterways would ined to purchase a new machine at a cost of 52,356 , and the unit cost of producing the units would be $10.30. (3) - Your answer is partially correct. Without considering the possibility of making the timing unit, evaluate whether Waterways should buy or continue to make the small fitting. The company should the fitting. Incremental cost / (savings) will be \$

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

Marketing Audit Benefits How A Marketing Audit Improves Your Business's Performance

Authors: Sharita Winder

1st Edition

B0BQXYKYYL, 979-8371064820

More Books

Students also viewed these Accounting questions