Koko Company manufactures 20,000 units of R-3 each year for use on its production line. At
this level of activity, the cost per unit for R-3 is:
Direct Materials $ 4.80
Direct Labor 7.00
Variable Manufacturing Overhead 3.20
Fixed Manufacturing Overhead 10.00
Total cost per part $ 25.00
An outside supplier has offered to sell 20,000 units of R-3 each year to Koko company for $23.50 per part. Koko company has determined that $6.00 of the fixed manufacturing overhead being applied to R-3 would continue if part R-3 were purchased from the outside supplier.
Should Koko accept the offer to purchase part R-3 from the outside supplier?
ANSWER __________________________
2. By how much will Koko be better or worse off (indicate better or worse) id the offer is accepted?
ANSWER __________________________
Koko Company manufactures 20,000 units of R-3 each year for use on its production line. At this...
Royal Company manufactures 20,000 units of part R-3 each year for use on its production line. At this level of activity, the cost per unit for part R-3 is: direct material 4.80 direct labor 7.00 variable manufacturing overhead 3.20 fixed manufacturing overhead 10.00 total cost per part 25.00 An outside supplier has offered to sell 20,000 units of part R-3 each year to Royal Company for $23.50 per part. If Royal Company accepts this offer, the facilities now being used...
1110110uui DOULW115 101 PO01 PIUIII. EXERCISE 12–12 Make or Buy a Component [LO3] Royal Company manufactures 20,000 units of part R-3 each year for use on its production line. At this level of activity, the cost per unit for part R-3 is: Direct materials ......... Direct labor ...................... Variable manufacturing overhead........ Fixed manufacturing overhead ......... Total cost per part ..... $ 4.80 7.00 3.20 10.00 $25.00 An outside supplier has offered to sell 20,000 units of part R-3 each year...
Han Products manufactures 20,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials$3.40 Direct labor 8.00 Variable manufacturing overhead 2.60 Fixed manufacturing overhead 9.00 Total cost per part $23.00 An outside supplier has offered to sell 20,000 units of part S-6 each year to Han Products for $19 per part. If Han Products accepts this offer, the facilities now being used to...
Han Products manufactures 30,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part 5-6 is: $ Direet materiala Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part 3.60 10.00 2.40 $ 25.00 An outside supplier has offered to sell 30,000 units of part 5-6 each year to Han Products for $21 per part. If Han Products accepts this offer, the facilities now being...
Han Products manufactures 38,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 3.10 10.00 2.90 9.00 $ 25.00 An outside supplier has offered to sell 38,000 units of part S-6 each year to Han Products for $21 per part. If Han Products accepts this offer, the facilities now...
Han Products manufactures 30,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials $ 3.60 Direct labor 10.00 Variable manufacturing overhead 2.40 Fixed manufacturing overhead 9.00 Total cost per part $ 25.00 An outside supplier has offered to sell 30,000 units of part S-6 each year to Han Products for $21 per part. If Han Products accepts this offer, the...
Make or Buy a Component [LO2] Royal Company manufactures 10,000 units of Part R-3 each year. At this level of activity, the cost per unit for Part R-3 follows Direct materials $14.40 Direct labour 21.00 Variable manufacturing overhead 9.60 Fixed manufacturing overhead 25.00 Total cost per part $70.00 An outside supplier has offered to sell 10,000 units of Part R-3 each year to Royal Company for $54 per part. However, Royal Company has determined that $15 of the fixed manufacturing...
Han Products manufactures 28,000 units of part 5-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per part $ 3.60 11.00 2.40 6.00 $ 23.00 An outside supplier has offered to sell 28,000 units of part S-6 each year to Han Products for $21 per part. If Han Products accepts this offer, the facilities now...
Han Products manufactures 40,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials $3.30 Direct labor 12.00 Variable manufacturing overhead Fixed manufacturing overhead 2.70 6.00 Total cost per part 24.00 An outside supplier has offered to sell 40,000 units of part S-6 each year to Han Products for $22 per part. If Han Products accepts this offer, the facilities now being used...
Han Products manufactures 31,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials $ 3.50 Direct labor 8.00 Variable manufacturing overhead 2.50 Fixed manufacturing overhead 6.00 Total cost per part $ 20.00 An outside supplier has offered to sell 31,000 units of part S-6 each year to Han Products for $18 per part. If Han Products accepts this offer, the facilities now...