Relevant cost of making = 9 + 7 + 1 + ( 5 * 80 % ) = $ 21
Relevant cost of buying = $ 19
Financial advantage of buying = ( 21 - 19 ) = $ 2 per unit on average
Option D is correct.
Supler Corporation produces a part used in the manufacture of one of its products. The unit...
Supler Corporation produces a part used In the manufacture of one of its products. The unit product cost is $22, computed as follows: al. Variable nanufacturirg overhead 1 Fixed nanufacturing overhead tUnit product cost 22 An outside supplier has offered to provide the annual requirement of 7,000 of the parts for only $16 each. The company estimates that 50 % of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume...
Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $17, computed as follows: Direct materials $ 6 Direct labor 3 Variable manufacturing overhead 3 Fixed manufacturing overhead 5 Unit product cost $ 17 An outside supplier has offered to provide the annual requirement of 7,800 of the parts for only $11 each. The company estimates that 60% of the fixed manufacturing overhead cost above could be eliminated if the parts...
Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $23, computed as follows: $ 8 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 1 6 $23 Unit product cost An outside supplier has offered to provide the annual requirement of 4,700 of the parts for only $10 each. The company estimates that 50% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased...
Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $19, computed as follows: Direct materials $ 7 Direct labor 5 Variable manufacturing overhead 2 Fixed manufacturing overhead 5 Unit product cost $ 19 An outside supplier has offered to provide the annual requirement of 6,600 of the parts for only $15 each. The company estimates that 80% of the fixed manufacturing overhead cost above could be eliminated if the parts...
Rutro Corp. makes 59,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct material $21.00 Direct labor 23.00 Variable manufacturing overhead 8.00 Fixed manufacturing overhead 30.00 Unit product cost $82.00 An outside supplier has offered to sell the company all of the 59,000 parts it needs for $75.00 a unit. If the company accepts this offer, the facilities now being used to make the...
Situation One Rutro Corp. makes 59,000 units per year of a part it uses in the products it manufactures- The unit product cost of this part is computed as follows: Direct material $21.00 Direct labor 23.00 8.00 Variable manufacturing overhead Fixed manufacturing overhead Unit product cost 30.00 $82.00 An outside supplier has offered to sell the company all of the 59,000 parts it needs for $75.00 a unit. If the company accepts this offer, the facilities now being used to...
Ralston Company makes 10,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $13.20 Direct labor 20.80 Variable manufacturing overhead 3.00 Fixed manufacturing overhead 10.90 Unit product cost $47.90 An outside supplier has offered to sell the company all of these parts it needs for $42.30 a unit. If the company accepts this offer, the facilities now being used to make the part...
Company makes 40,000 units per year of a part that it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 11.30 Direct labour $ 22.70 Variable manufacturing overhead $ 1.20 Fixed manufacturing overhead $ 24.70 Unit product cost $ 59.90 An outside supplier has offered to sell the company all the parts that Company needs for $46.20 a unit. If the company accepts this offer, the facilities now being...
Foto Company makes 14,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $13.60 21.20 3.40 11.30 $49.50 An outside supplier has offered to sell the company all of these parts it needs for $42.70 a unit. If the company accepts this offer, the facilities now being used to make the part...