PA6. Gent Designs requires three units of part A for every unit of Al that it...
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PA6. Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4,000 units were produced: Direct materials $4.00 Direct labor 1.50 Manufacturing overhead 1.30 Total $6.80 Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next year's production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. If Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation? PA6. Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4,000 units were produced: Direct materials $4.00 Direct labor 1.50 Manufacturing overhead 1.30 Total $6.80 Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next year's production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. If Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
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Per unit Total 6000 units Make Buy Make Buy Direct materials 400 24000 Direct labor 150 ... View the full answer
Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
Posted Date:
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