Answered step by step
Verified Expert Solution
Question
1 Approved Answer
X Company currently buys a part from a supplier for $13.12 per unit but is considering making the part itself next year. This year, they
X Company currently buys a part from a supplier for $13.12 per unit but is considering making the part itself next year. This year, they purchased 3,100 units of this part; next year they think they will need 3,500 units. Estimated costs to make the part are: Direct materials Direct labor Variable overhead Fixed overhead Total Per-Unit $2.30 4.56 3.80 4.80 Total $7,130 14,136 11,780 14,880 $15.46 $47,926 Of the estimated fixed overhead, $6,101 are common costs that would be allocated to the part; the rest would be additional fixed overhead costs. X Company currently rents unused factory space for $2,300; it will have to use this space to make the part. If X Company continues to buy the part instead of making it, it will save -29211 Submit Answer Incorrect.Tries 2/5 Previous Tries
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