Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

We Make Company has traditionally manufactured a number of different standard machine parts. It is now exploring an outsourcing decision for several of the parts

image text in transcribed
We Make Company has traditionally manufactured a number of different standard machine parts. It is now exploring an outsourcing decision for several of the parts that it currently produces. Cost information for one such machine part is given below. Variable cost/unit Fixed manufacturing costs (total) Allocated corporate overhead Unit product cost (based on 500 unita) $ 29.00 4.060.00 6,250.00 s 49.62 Fifty percent of the fixed manufacturing costs are directly traceable to this specific machine part and therefore avoidable. An outside supplier will sell the part at a price of $46 per unit if 500 units are purchased. Required: Prepare an analysis whether We Make should continue to manufacture this machine part or whether it should purchase it from the outside supplier (Negative amounts should be indicated by a minus sign. Round "Per Unit" to 2 decimal places.) 500 Units Buy Make Per Unit Difference Purchase Variable cost Fixed manufacturing overhead Common costs Total costs

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

Modern Internal Auditing Appraising Operations And Controls

Authors: Victor Z. Brink, Herbert N. Witt

4th Edition

0471080977, 978-0471080978

More Books

Students also viewed these Accounting questions

Question

=+2. How did the study operationally define these variables?

Answered: 1 week ago