TOTAL PRODUCTION COST FOR 48000 UNIT | ||||||
PARTICULAR | UNIT | RATE | TOTAL | |||
VARIABLE COST | 48,000.00 | 2.95 | 1,41,600.00 | |||
FIXED COST | 83,000.00 | |||||
TOTAL COST | 2,24,600.00 | |||||
TOTAL UNITS | 48,000.00 | |||||
PER UNIT COST | 4.68 | |||||
WHEN PURCHASE | ||||||
PARTICULAR | UNIT | RATE | TOTAL | |||
PURCHASE PRICE | 48000 | 3.5 | 1,68,000.00 | |||
INCREMENT COST (PRODUCTION COST-PURCHASE COST) | 56,600.00 | |||||
INCREMENT COST (PER UNIT) - (INCREMENT COST/UNITS) | 1.18 | |||||
ALLOCATED FIXED COST ARE NOT TAKEN IN CONSIDERATION, IT IS A SUNK COST | ||||||
IT IS SAME IN BOTH SITUATION | ||||||
PURCHASE FROM OUTSIDE IS A BETTER OPTION, WE SAVE 1.18 COST PER UNIT, TOTAL SAVING OF 56,600/- |
Chap 23 Homework Gelb Company currently manufactures 48,000 units per year of a key component for...
Gelb Company currently manufactures 53,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $79,000 per year, and allocated fixed costs are $62,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 53,000 and buying 53,000...
Gelb Company currently manufactures 59,500 units per year of a key component for its manufacturing process. Variable costs are $4.05 per unit, fixed costs related to making this component are $65,000 per year, and allocated fixed costs are $63,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 59,500 units and buying...
Gelb Company currently manufactures 54,500 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $89,000 per year, and allocated fixed costs are $63,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making 54,500 and buying 54,500...
Gelb Company currently manufactures 47,000 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $67,000 per year, and allocated fixed costs are $66,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 47,000 and buying 47,000...
Gelb Company currently manufactures 40,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $77,000 per year, and allocated fixed costs are $65,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making and buying 40,000 units....
Gelb Company currently manufactures 40,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $77,000 per year, and allocated fixed costs are $65,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making and buying 40,000 units....
Sad Gelb Company currently manufactures 58,000 units per year of a key component for its manufacturing process. Variable costs are $7.35 per unit, fixed costs related to making this component are $69.000 per year, and allocated fixed costs are $77,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 58,000 and buying...
Gelb Company currently manufactures 58,000 units per year of a key component for its manufacturing process. Variable costs are $7.35 per unit, fixed costs related to making this component are $69,000 per year, and allocated fxed costs are $77,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit Calculate the total incremental cost of making 58,000 and buying 58,000...
Exercise 23-5 Make or buy LO A1 Gelb Company currently manufactures 56,000 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $73,000 per year, and allocated fixed costs are $81,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. points Calculate the total...
Gilberto Company currently manufactures 89.000 units per year of one of its crucial parts. Variable costs are $3.15 per unit, fixed costs related to making this part are $99.000 per year, and allocated fixed costs are $86,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $4.35 per unit guaranteed for a three-year period Calculate the total incremental cost of...