Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

thumbs up for a clear cut answer Trey's Trucks uses a standard part in the manufacture of several of its trucks. The cost of producing

thumbs up for a clear cut answer
image text in transcribed
Trey's Trucks uses a standard part in the manufacture of several of its trucks. The cost of producing 50,000 parts is $160,000, which includes fixed costs of $70,000 and varable costs of $90,000 The company can buy the part from an outside supplier for $3.30 per unit and avoid 30% of the fixed costs. Assume that factory space freed up by purchasing the part from an outside source can be used to manufacture another profuct that can be sold for $16,000 proft. If the company malies the par what will its operating income be? A. $65,000 greater than if the company bought the part B. $38,000 less than if the company bought the part C. $198,000 greater than if the company bought the part D. $38,000 greater than if the company bought the part

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_2

Step: 3

blur-text-image_3

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

Fundamentals of Cost Accounting

Authors: William Lanen, Shannon Anderson, Michael Maher

4th edition

78025524, 978-0078025525

More Books

Students also viewed these Accounting questions

Question

5. How are memory and orientation related?

Answered: 1 week ago