Answered step by step
Verified Expert Solution
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 ofthe parts that
We Make Company has traditionally manufactured a number of different standard machine parts. It is now exploring an outsourcing decision for several ofthe parts that it currently produces. Cost information for one such machine part is given below: Variable cost/unit $ 31. 00 Fixed manufacturing costs (total) 5, 720. 00 Allocated corporate overhead 6, 560. 00 Unit product cost (based on 500 units) 3 55. 5E: Fifty percent of the xed manufacturing costs are directly traceable to this specic machine part and therefore avoidable. An outside supplier will sell the part at a price of $56 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.) Pushes _l_l_l_ Variable cost Fixed manufacturing overhead __l_i_ Totancosts _ Should the company make or buy
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started