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T S.p.A. produces in a specialized department a component (annual volume: 1000 units) whose industrial unitary cost (selling cost) is the following: Could you explain
T S.p.A. produces in a specialized department a component (annual volume: 1000 units) whose industrial unitary cost (selling cost) is the following:
Could you explain step-by-step how to solve this exercise properly?
Industrial unitary cost Raw materials 30 Direct labor (2 workers, each 25) 50 22 Depreciation (machinery) Training for usage of machinery Machinery power (excluded fixed fee) 18 20 Provisions (selling cost) 5 Industrial general overhead costs 50 - An external supplier offers the same component at a unitary price equal to 85 . Knowing that: Machineries are neither transferable to third parties nor they can be re-used; Machineries used have been completely paid to the machinery-supplier; Machineries used have a counter which measure their variable machinery power; Direct labor is made by two workers. The first worker is not employable in another department, because he will retire; the second worker becomes a part time worker (70%) but he could not be employed in another department. Industrial general costs would not decrease but the allocation basis (direct work) generates a new unitary cost of 52. a Determine whether Taylor S.p.A. has economic convenience or not in accepting the supplier offer. TVTDCISTStep by Step Solution
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