Question: Please answer all three sections 2 Exercise 23-5 Make or buy LO A1 Gelb Company currently manufactures 40,000 units per year of a key component

Please answer all three sections
 Please answer all three sections 2 Exercise 23-5 Make or buy
LO A1 Gelb Company currently manufactures 40,000 units per year of a
key component for its manufacturing process. Variable costs are $1.95 per unit,

2 Exercise 23-5 Make or buy LO A1 Gelb Company currently manufactures 40,000 units per year of a key component for its manufacturing process. Variable costs are $1.95 per unit, fixed costs related to making this component are $65,000 per year, and allocated fixed costs are $58,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. ints Calculate the total incremental cost of making 40,000 units and buying 40,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? eBook Hint Complete this question by entering your answers in the tabs below Costs to Make Costs to Buy Supplier Print Calculate the total incremental cost of buying 40,000 units. (Round "purchase price per unit" answer to 2 decimal places.) References l Costs to Buy Relevant Relevant Total Relevant Amount pr Fixed Costs Costs Unit Total incremental cost to buy Costs to Make Outside Supplier>

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

\f