Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

X Company currently buys a part from a supplier for $14.76 per unit but is considering making the part itself next year. Estimated costs to

X Company currently buys a part from a supplier for $14.76 per unit but is considering making the part itself next year. Estimated costs to make the part next year are: Direct materials Direct labor Variable overhead Fixed overhead Total Per-Unit $2.73 Total $9,009 4.74 15,642 4.30 14,190 5.20 $16.97 17,160 $56,001 Of the estimated fixed overhead, $7,379 are common costs that would be allocated to the part; the remainder would be additional fixed overhead costs. X Company currently receives $3,000 a year by renting out unused factory space, but it will have to use this space to make the part. This year, they purchased 3,300 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? Submit Answer Tries 0/3

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

Financial Services And Markets

Authors: Dr. Punithavathy Pandian

8125931201, 978-8125931201

Students also viewed these Accounting questions