Animals United currently outsources pet beds for their product line. The beds are purchased for $30...
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Animals United currently outsources pet beds for their product line. The beds are purchased for $30 each. The company is considering making the beds instead and have looked at the costs involved. They are: Unit-level material cost Unit-level labor cost Unit-level overhead cost Batch-level cost (100 per batch) Product-level supervisor salary Allocated facility level cost $7 $3 $2 $150 $20,000 $16,000 Assume the company has demand for 500 beds. If they decide to make the beds, what are the total relevant costs? Should Animals United buy or make the beds? Animals United currently outsources pet beds for their product line. The beds are purchased for $30 each. The company is considering making the beds instead and have looked at the costs involved. They are: Unit-level material cost Unit-level labor cost Unit-level overhead cost Batch-level cost (100 per batch) Product-level supervisor salary Allocated facility level cost $7 $3 $2 $150 $20,000 $16,000 Assume the company has demand for 500 beds. If they decide to make the beds, what are the total relevant costs? Should Animals United buy or make the beds?
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To calculate the total relevant costs for producing 500 pet beds you need to consider both the unitlevel costs and the relevant batchlevel productleve... View the full answer
Related Book For
Financial Analysis with Microsoft Excel
ISBN: 978-1285432274
7th edition
Authors: Timothy R. Mayes, Todd M. Shank
Posted Date:
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