Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

X Company currently buys a part from a supplier for $13.33 per unit but is considering making the part itself next year. Estimated costs to

X Company currently buys a part from a supplier for $13.33 per unit but is considering making the part itself next year. Estimated costs to make the part next year are: Direct materials Per-Unit $3.51 Total $12,285 Direct labor 3.26 11,410 Variable overhead 3.70 12,950 Fixed overhead Total 3.30 $13.77 11,550 $48,195 Of the estimated fixed overhead, $5,890 would be additional fixed overhead costs; the remainder would be common costs allocated to the part. X Company currently receives $2,900 a year by renting out unused factory space, but it will have to use this space to make the part. This year, they purchased 3,500 units of this part, but they're not certain how many units they will need next year. How many units will make them indifferent between continuing to buy the part and making it? Tries 0/4

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

Accounting Double Entry Exercises 40 Full Cycle Accounting Cases With Solutions

Authors: L Castelluzzo

1st Edition

1731173954, 978-1731173959

More Books

Students also viewed these Accounting questions