Requirement 1
Financial (Disadvantage) | $ (80,000.00) |
.
Statement of Cost Analysis(20000 Units) | |||
Make | Buy | Inremental (cost) or benefit | |
Purchase Price | $ - | $ 720,000.00 | $ (720,000.00) |
Direct Material | $ 340,000.00 | $ - | $ 340,000.00 |
Direct labor | $ 200,000.00 | $ - | $ 200,000.00 |
Variable Manufacturing Overheads | $ 40,000.00 | $ - | $ 40,000.00 |
Fixed Manufacturing Overheads,Avoidable | $ 60,000.00 | $ 60,000.00 | |
Opportunity cost | $ - | ||
Total Relevant Cost | $ 640,000.00 | $ 720,000.00 | $ (80,000.00) |
.
Requirement 2
No
The offer should be rejected.
.
Requirement 3
Financial Advantage | $ 120,000.00 |
.
Statement of Cost Analysis(20000 Units) | |||
Make | Buy | Inremental (cost) or benefit | |
Purchase Price | $ - | $ 720,000.00 | $ (720,000.00) |
Direct Material | $ 340,000.00 | $ - | $ 340,000.00 |
Direct labor | $ 200,000.00 | $ - | $ 200,000.00 |
Variable Manufacturing Overheads | $ 40,000.00 | $ - | $ 40,000.00 |
Fixed Manufacturing Overheads,Avoidable | $ 60,000.00 | $ 60,000.00 | |
Opportunity cost | $ 200,000.00 | $ 200,000.00 | |
Total Relevant Cost | $ 840,000.00 | $ 720,000.00 | $ 120,000.00 |
Requirement 4
Yes
The offer should be accepted
d Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company...
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $36 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Direct materials Direct labor Variable...
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $36 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Direct materials Direct labor Variable...
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $35 per unit. To evaluate this offer, Troy Engines, Ltd. has gathered the following information relating to its own cost of producing the carburetor internally Direct materials Direct labor Variable...
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $34 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Direct materials Direct labor Variable...
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $36 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: 15,000 Units Per Unit Year...
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $35 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Direct materials Direct labor Variable...
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $37 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: 23,000 Units Per Unit...
Troy Engines... Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $35 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: points 16,000 Units...
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $36 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: 20,000 Units Per Unit Per...
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $36 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Direct materials Direct labor Variable...