Question

Question 8 4.5 pts JLM Company makes 12,000 units per year of a part it uses in the products it manufactures. The per unit produ ct cost of this part is shown below: direct materials ............. direct labor .................. variable overhead ............. fixed overhead total. ... $15.00 16.00 11.00 22222 $????? An outside supplier has offered to sell JLM Company 12,000 units of this part a year for $55.00 per unit. If JLM Company accepts this offer, the facilities now being used to make this part could be used to make more units of a product that is in high demand. The additional contribution margin that coul d be earned on this other product would be $34,800 per year. 60% of the fixed overhead would be eliminate dif JLM purchases the part from the outside supplier. The othe r 40% of the fixed overhead is allocated and would be still be incurred even if the part is purchased from the outside suppl ier. It has been determined that if JLM Company p urchases the part from the outside supplier their net income w ould increase by $30,000. Calculate the fixed overhead cost per unit r elated to this part.

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

Answer 3 The correct answer is fixed overhead cost per unit related to this part $ 21 5 Calculations 6 increase in net Income = Relevant make cost-relevant purchase cost 7 30000 = ((12000*(15+16+11))+60%of fixed overheads) - ((12000*55)-34800) 30000 = 504000 + 60% of fixed overheads -625200 9 (30000+625200-504000)/60% = fixed overheads 10 $ 252000 = fixed overheads 11 12 13 Thus the fixed overhead cost per unit = total fixed overheads /12000 14 = 252000/12000 15 = $ 21 Per Unit 16 17 The correct answer is $ 21