Variable costs to make | 15 | |
Add: Avoidable fixed cost | 3 | =8-5 |
Total relevant cost to make | 18 | |
Total relevant cost to make | 18 | |
Less: Cost to buy | 17 | |
Savings in cost per unit | 1 | |
Total savings | 5300 | |
Buy; Savings = $5300 | ||
Option 4 is correct |
Swifty Corporation currently manufactures a wicket as its main product. The costs per unit are as...
Coronado Industries currently manufactures a wicket as its main product. The costs per unit are as follows: Direct materials and direct labor $14 Variable overhead 5 Fixed overhead 8 Total $27 Saran Company has contacted Coronado with an offer to sell it 6300 of the wickets for $21 each. If Coronado makes the wickets, variable costs are $19 per unit. Fixed costs are $8 per unit; however, $5 per unit is unavoidable. Should Coronado make or buy the wickets? Make;...
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CHRYSOT GOSt per pound ise 2 nan Corporation currently manufactures a subassembly for its main produd. The it are as follows: Direct materiais $10 Direct labor 20 Variable overhead Fixed overhead 9 Total $36 mpany has contacted Troutman with an offer to sell it 6,000 of the subassemidies for $25 Troutman makes the subassemblies, $4 of the fixed overhead per unit will be allocate products. ons outman make or buy the subassemblies? Explain your answer.