Vaughn Co. produces 5200 units of part Alpha-E for use in one its products. The following...
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Vaughn Co. produces 5200 units of part Alpha-E for use in one its products. The following costs are incurred at that level of production: Direct materials $ 54000 Direct labor 165000 Variable overhead 80000 Fixed overhead 178000 If Vaughn buys the part from an outside supplier, $46000 of the fixed overhead is avoidable. The outside supplier has offered to sell the units at $64 per unit. The increase (decrease) in net income from purchasing the part from the outside supplier would be O $66800 decrease O $12200 increase O $54800 increase O $12200 decrease Vaughn Co. produces 5200 units of part Alpha-E for use in one its products. The following costs are incurred at that level of production: Direct materials $ 54000 Direct labor 165000 Variable overhead 80000 Fixed overhead 178000 If Vaughn buys the part from an outside supplier, $46000 of the fixed overhead is avoidable. The outside supplier has offered to sell the units at $64 per unit. The increase (decrease) in net income from purchasing the part from the outside supplier would be O $66800 decrease O $12200 increase O $54800 increase O $12200 decrease
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Cost of produced In House Direct MaterialsDirect LaborV... View the full answer
Related Book For
Cost Accounting Foundations and Evolutions
ISBN: 978-1111626822
8th Edition
Authors: Michael R. Kinney, Cecily A. Raiborn
Posted Date:
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