Question: Please explain how the answer was obtained. thanks Given the following data: Units Produced: 10,000 Direct Materials cost per unit: $5 Direct Labor cost per

Please explain how the answer was obtained. thanks

Given the following data: Units Produced: 10,000 Direct Materials cost per unit: $5 Direct Labor cost per unit: $4 Variable Overhead Costs per unit: $3 Fixed Overhead costs per unit: $6 (will not change) Purchase Price per unit if bought: $15 Additional rent revenue generated if the product is bought: $35,000 Should the company make or buy the product?

A) Make the product because it will save $30,000

B) Buy the product because it wil save $30,000

C) Make the product because it will save $5,000

D) Buy the product because it will save $5,000

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!

Please explain how the answer was obtained. thanks Given the following data: Units Produced: 1 0 , 0 0 0 Direct Materials cost per unit: $ 5 Direct Labor cost per unit: $ 4 Variable Overhead Costs...

Petrako Manufacturing Company makes special filters for the heavy equipment industry. Actually, the company produces and sales between 120,000 and 130,000 units per month (at 85% production capacity)...

INFORMATION The following forecasts for January 2021 were provided by Waltons Manufacturers: Sales (36 000 units) R1 080 000 Direct materials cost per unit R8 Direct labour cost per unit R5 Variable...

NEED FROM 5 - 10 Petrako Manufacturing Company makes special filters for the heavy equipment industry. Actually, the company produces and sales between 120,000 and 130,000 units per month (at 85%...

Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow. V-1 V-2 Units produced 10,000 1,000 Direct materials cost per...

9-38 Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow. V-1 V-2 Units produced 10,000 1,000 Direct materials...

please see attachment Upriver Part5 manufactures two products. V1 and V2, at its River Plant. Selected data for an average month for the two products follow. Vl V-Z Units produced 16,666 1,666 Direct...

The Personnel Department at Hernandez Bros. is centralized and provides services to the two operating units: Miami and New York. The Miami unit is the original unit of the company and is well...

What common element exists in implementing both integrated quality control and integrated preventative maintenance?

Claire Company manufactures organic cosmetics and has summarized the following monthly costs observed at various activity levels over their first year of operations. Considering your knowledge of...

3 reasons why t notes, bills, and bonds are risk free

Wolfrum Technology (WT) has no debt. Its assets will be worth $400 million one year from now if the economy is strong, but only $261 million in one year if the economy is weak. Both events are...

(Appendices) Select a commonly used product, such as gasoline or milk, and track the prices of this product over a 20-year period by creating a line graph. Explain price increases and decreases based...

(Appendices) Search magazines, newspapers, and the Internet for advertisements. Collect or print out ads that offer the following: (a) something for nothing, (b) bonus for early reply, (c) offers of...

(Appendices) Brandon, age 32, is married and has a son, age one. Six months ago, Brandon purchased an individual health insurance policy covering the entire family. His son was recently diagnosed...