Han Products manufactures 47,500 units of part S-6 each year for use on its production line....
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Han Products manufactures 47,500 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S6 is as follows: Direct materials Direct labour Variable overhead Fixed overhead $ 5.25 11.25 4.25 10.05 ook Total cost per part $30. 80 nt lences An outside supplier has offered to sell 41.500 units of part S-6 each year to Han Products for $27.25 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S 6 could be rented to another company at an annual rental of $98.000. However, Han Products has determined that 30% of the fixed overhead being applied to part S 6 will be avoided if part S-6 is purchased from the outside supplier. Required: 1. What is the net dollar advantage or disadvantage of accepting the outside supplier's offer? (Round "Total costs" and finel answer to the nearest whole doller omount.) Net dollar disadvantage Han Products manufactures 47,500 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S6 is as follows: Direct materials Direct labour Variable overhead Fixed overhead $ 5.25 11.25 4.25 10.05 ook Total cost per part $30. 80 nt lences An outside supplier has offered to sell 41.500 units of part S-6 each year to Han Products for $27.25 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S 6 could be rented to another company at an annual rental of $98.000. However, Han Products has determined that 30% of the fixed overhead being applied to part S 6 will be avoided if part S-6 is purchased from the outside supplier. Required: 1. What is the net dollar advantage or disadvantage of accepting the outside supplier's offer? (Round "Total costs" and finel answer to the nearest whole doller omount.) Net dollar disadvantage
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Per Unit Differential Costs 41500 Units Make Buy Make Buy 1130875 Cost of purchasing Cost of making ... View the full answer
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