Eggers Company needs 27,000 units of a part to use in producing one of its products....
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Eggers Company needs 27,000 units of a part to use in producing one of its products. If Eggers buys the part from McMillan Company for $110 instead of making it, Eggers will not use the released facilities in another manufacturing activity. Forty percent of the fixed overhead will continue irrespective of CEO Donald Mickey's decision. The cost data are as follows: Cost to make the part: Direct materials. Direct labor Variable overhead Fixed overhead $42 18 26 30 $ 116 Required: 1. Determine which alternative is more attractive to Eggers, and by what amount. Alternative Saving per unit Eggers Company needs 27,000 units of a part to use in producing one of its products. If Eggers buys the part from McMillan Company for $110 instead of making it, Eggers will not use the released facilities in another manufacturing activity. Forty percent of the fixed overhead will continue irrespective of CEO Donald Mickey's decision. The cost data are as follows: Cost to make the part: Direct materials. Direct labor Variable overhead Fixed overhead $42 18 26 30 $ 116 Required: 1. Determine which alternative is more attractive to Eggers, and by what amount. Alternative Saving per unit
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Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
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