Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Take me to the text Marty Monitors Ltd, a manufacturer of computer monitors, currently produces a 19-inch LCD monitor. The company's accounting department has reported

image text in transcribed
image text in transcribed
Take me to the text Marty Monitors Ltd, a manufacturer of computer monitors, currently produces a 19-inch LCD monitor. The company's accounting department has reported the following annual costs of producing the LCD monitor internally Marty Monitors Annual Production Costs for 19-inch LCD Monitor Per Unit 9,000 Units Direct Materials $29.00 $261,000 Direct Labor $12.00 $100,000 Variable Overheid $11.00 599,000 Production Supervisor's Salary 59,00 $81.000 Depreciation of LCD manufacturing equipment $5.00 $45,000 Allocated Fixed Overhead $15.00 $135,000 Total Cost $81.00 $729,000 An external supplier has offered to provide Marty Monitors 9.000 units of the same LCD monitor per year at a price of $46 each Also consider the following information The LCD manufacturing equipment has no salvage value and has no other use aside from producing the 19-inch LCD monitors. It cannot be solel. The fixed overhead costs allocated to the LCD monitors are common to all items produced in the factory. The production supervisor will take over duties in another department if the monitors are purchased from the external supplier. If this is the case, his annual salary will drop to $72,900. Should the company continue manufacturing the monitors internally or begin purchasing them from the external supplier? Do not enter dollar signs or commas in the input boxes Round all answers to 2 decimal places annual salary will drop to $72,900. Should the company continue manufacturing the monitors internally or begin purchasing them from the external supplier? Do not enter dollar signs or commas in the input boxes. Round all answers to 2 decimal places Jenson Monitors Make or Buy Analysis Production Cost Per Unit Per Unit Differential Cost Make Buy Total Differential Cost (9,000 Units) Make Buy $ $ 5 $29.00 S Direct Materials $ $ $ $12.00 $ Direct Labor $ $11.00 $ $ $ Variable Overhead $ $ $9.00 $ Supervisor's Salary $5.00 $ $ Depreciation of Equipment (sunk) $ $ $ $ $ $15.00 $ Allocated Fixed Overhead (common) $ $ $ Outside Purchase Price $ $ $ $81.00 $ Total Relevant Cost Buy Make D The company should

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

More Books

Students also viewed these Accounting questions