Answered step by step
Verified Expert Solution
Question
1 Approved Answer
X Company currently buys a part from a supplier for $13.31 per unit but is considering making the part itself next year. This year, they
X Company currently buys a part from a supplier for $13.31 per unit but is considering making the part itself next year. This year, they purchased 3,300 units of this part; next year, they think they will need 3,800 units. Estimated costs to make the part are: Direct materials Direct labor Variable overhead Fixed overhead Total Per-Unit $3.28 3.66 4.00 5.40 Total $10,824 12,078 13,200 17,820 $16.34 $53,922 of the estimated fixed overhead,8,375 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 $2,600; 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 4224 Submit Answer Tries 1/5 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