Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its

image text in transcribed
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $33 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: 15,800 Per Units Unit Per Year Direct materials $ 9 $142,200 Direct labor 173,800 Variable manufacturing overhead 15,800 Fixed manufacturing overhead, traceable 9* 142,200 Fixed manufacturing overhead, allocated 13 205,400 Total cost $ 43 $ 679,400 *40% supervisory salaries, 60% depreciation of special equipment (no resale value). Required: 1a. Assuming that the company has no alternative use for the facilities that are now being used to produce the carburetors, compute the total cost of making and buying the parts. (Round your Fixed manufacturing overhead per unit rate to 2 decimals.) Make Buy Total relevant cost (15,800 units)

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

Principles Of Accounting And Principles Of Financial Accounting

Authors: Belverd E Needles, Marian Powers, Susan V Crosson

12th Edition

1133962459, 9781133962458

More Books

Students also viewed these Accounting questions

Question

=+a) What is the maximin choice?

Answered: 1 week ago