Kando Company currently pays $12 per unit to buy a part for a product it manufactures....

 

Transcribed Image Text:

Kando Company currently pays $12 per unit to buy a part for a product it manufactures. Instead, Kando could make the part for per unit costs of $5 for direct materials, $3 for direct labor, and $1 for incremental overhead. Kando normally applies overhead costs using a predetermined rate of 200% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (b) Should Kando make or buy the part? Direct materials Direct labor Overhead Cost to buy Cost per unit Company should: Make Buy Kando Company currently pays $12 per unit to buy a part for a product it manufactures. Instead, Kando could make the part for per unit costs of $5 for direct materials, $3 for direct labor, and $1 for incremental overhead. Kando normally applies overhead costs using a predetermined rate of 200% of direct labor cost. (a) Prepare a make or buy analysis of costs for this part. (b) Should Kando make or buy the part? Direct materials Direct labor Overhead Cost to buy Cost per unit Company should: Make Buy

Answer rating: 100% (QA)

Sure I can help you analyze the image you sent which is a makeorbuy decision for Kando Company Analysing the cost per unit to make the part Direct materials 5 per unit Direct labor 3 per unit Incremen... View the full answer