Question

Part 043 is used in one of Scheet Corporation's products. The company's Accounting Department reports the following costs of producing the 15.100 units of the part e nded every year $300 Direct mators Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Alocated general overhead $5 80 $6 30 $450 An outside supplier has offered to make the part and sell it to the company for $2400 cachIf this offer is accepted the supervisor's salary and all of the variable costs, including direct labor can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents tored costs of the end company if the outside supplier's offer were accepted, only $21,100 of these allocated general overhead costs would be avoided Required: a. Prepare a report that shows the effect on the company's total net operating income of buying part 043 from the supplier rather than continuing to make it inside the company input the amount as positive value.) Make Buy

Answer 1

Paice 1stounits) make Dizect maternal 2abaus उग्स्यव 36200 45300 Vagniable supenisor's Saloy 95130 hoidable Fted Cast Cis,laox 24) 362410 3624 21 loo Purchase (ast 7otal 2793 10 Net oferatin income decrease (362 400- 2793) $230৭0 Trerepse it is Porofitable e make Poraduct