Total cost to produce =
Direct materials = $25,000
Direct Labor = $9,500
Variable overhead = $23,000
Total variable cost = $57,500
or the company can purchase it externally for $65,000.
A increase in costs of ($65,000 - $57,500) = $7,500
Option '1' is correct
Sunland Company can produce 100 units of a component part with the following costs: Direct Materials...
Marigold Corp. can produce 100 units of a component part with the following costs: $20000 Direct Materials Direct Labor 4500 Variable Overhead 18000 Fixed Overhead 11000 If Marigold Corp. can purchase the units externally for $50000, by what amount will its total costs change? An increase of $15500 Anincrease of $7500 A decrease of $11000 An increase of $50000
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Park Industries can produce 100 units of a component part with the following costs: Direct Materials $12000 Direct Labor 3500 Variable Overhead 13000 Fixed Overhead 11000 If Park Industries can purchase the component part externally for $33000 and only $4000 of the fixed costs can be avoided, what is the correct make-or-buy decision? A. Make and save $500 B. Make and save $2,500 C. Buy and save $4,500 D. Buy and save $2,500
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Coronado’s Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials $120000 Direct Labor 23000 Variable Overhead 54000 Fixed Overhead 30000 If Coronado’s Manufacturing Company can purchase the component externally for $195000 and only $7000 of the fixed costs can be avoided, what is the correct make-or-buy decision? a. Make and save $22000 b. Buy and save $9000 c. Buy and save $22000 d. Make and save $9000
Waterway's Shop can make 1000 units of a necessary component with the following costs: Direct Materials $40000 Direct Labor 6000 Variable Overhead 3000 Fixed Overhead The company can purchase the 1000 units externally for $55000. The unavoidable fixed costs are $2000 if the units are purchased externally. An analysis shows that at this external price, the company is indifferent between making or buying the part. What are the fixed overhead costs of making the component? $6000 $8000 $4000 Cannot be...