Need Help with Section D

George studied relevant costing in his introductory and upper-level accounting courses, but never thought he would use those skillslet alone so soon! Yet here he is, in the second month of his summer internship at a snowmobile and personal watercraft manufacturing company. His boss, Jeff, needs help. The company currently makes its own handlebar kits for all snowmobile models and personal watercraft models. Variable costs to produce one batch of 110 units are as follows. The company's fixed manufacturing costs related to the handlebar kits amount to $15,600. One-third of these costs are avoidable if it chooses to buy these components rather than make them in-house. Jeff is receiving some pressure from company executives to find cost savings in operations and processes. The handlebar kit is the starting point in his review of products and processes. (a) Your answer is correct. What is the relevant cost to make one handlebar kit? If a supplier approached George's boss and offered to sell the company handlebar kits for $430 each, what would Jeff's response be? Why? The company be willing to purchase as relevant cost to make is eTextbook and Media Attempts: 1 of 3 used Your answer is correct. If a supplier offered to sell the company handlebar kits for $275 each, what would Jeff's response be? The company be willing to purchase as relevant cost to make is Your answer is incorrect. Jeff conducts additional research to determine if the handlebar manufacturing space could be used for any other purpose. He finds that if the company can free up that space, it can be used to increase production volume for snowmobiles and watercraft. Given that demand for these products has been strong, the company feels confident it could sell the higher volume of products with no difficulty. This additional volume would increase the company's operating income by $10,800. Does this situation change your answer to either part (b) or part (c)? (Round answers to 2 decimal places, e.g. 15.25.) Net cost to buy is $ Net cost to buy is $ per unit. The company per unit. The company be willing to purchase at $430 per unit. be willing to purchase at $275 per unit. George studied relevant costing in his introductory and upper-level accounting courses, but never thought he would use those skillslet alone so soon! Yet here he is, in the second month of his summer internship at a snowmobile and personal watercraft manufacturing company. His boss, Jeff, needs help. The company currently makes its own handlebar kits for all snowmobile models and personal watercraft models. Variable costs to produce one batch of 110 units are as follows. The company's fixed manufacturing costs related to the handlebar kits amount to $15,600. One-third of these costs are avoidable if it chooses to buy these components rather than make them in-house. Jeff is receiving some pressure from company executives to find cost savings in operations and processes. The handlebar kit is the starting point in his review of products and processes. (a) Your answer is correct. What is the relevant cost to make one handlebar kit? If a supplier approached George's boss and offered to sell the company handlebar kits for $430 each, what would Jeff's response be? Why? The company be willing to purchase as relevant cost to make is eTextbook and Media Attempts: 1 of 3 used Your answer is correct. If a supplier offered to sell the company handlebar kits for $275 each, what would Jeff's response be? The company be willing to purchase as relevant cost to make is Your answer is incorrect. Jeff conducts additional research to determine if the handlebar manufacturing space could be used for any other purpose. He finds that if the company can free up that space, it can be used to increase production volume for snowmobiles and watercraft. Given that demand for these products has been strong, the company feels confident it could sell the higher volume of products with no difficulty. This additional volume would increase the company's operating income by $10,800. Does this situation change your answer to either part (b) or part (c)? (Round answers to 2 decimal places, e.g. 15.25.) Net cost to buy is $ Net cost to buy is $ per unit. The company per unit. The company be willing to purchase at $430 per unit. be willing to purchase at $275 per unit