Homework Answers
| Per unit | Total 8000 units | |||
| Make | Buy | Make | Buy | |
| Variable production cost | 16 | 128000 | ||
| Fixed production cost avoidable | 5 | 40000 | ||
| Purchase cost | 28 | 224000 | ||
| Total | 168000 | 224000 | ||
| Difference in favor of making = 168000-224000 = $56000 | ||||
| Financial (disadvantage) (56000) | ||||
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Sharp Corporation produces 8,000 parts each year, which are used in the production of one of...
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Gottlieb Manufacturing produces 8,000 parts each year, which are usedin the production of one of its products. Theunit product cost of a part is $36, of which variable production costis $16 per unit and fixed production cost is $20 per unit. The same parts can be purchased from an outside supplierfor only $28 each. The space in which the parts are now produced wouldbeidle and fixed production costs would be reduced by 25%. Based on this data, what is the...
Supler Corporation produces a part used In the manufacture of one of its products. The unit...
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Supler Corporation produces a part used in the manufacture of one of its products. The unit...
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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...
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