Question
This Question is about Managerial Accounting Yellow Company produces 20,000 units of a part that it needs for of its product. A supplier notified C
This Question is about Managerial Accounting Yellow Company produces 20,000 units of a part that it needs for of its product. A supplier notified C that it would supply the same part for a price of $30 per part The annual production costs to produce the needed 20,000 parts are as follows: Direct materials$ 230,000.00 Direct labor$ 10,000.00 Indirect production costs variable$ 140,000.00 Indirect production costs fixed$ 275,000.00 The unused facilities could also be rented out at an annual rent of $100,000, and that would result in a reduction of Indirect PC Fixed of $30,000 Required: Determine if Yellow Company should buy the part or produce it internally.
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