The Ward Company produces gas grills. This The expected production for the year is 30 point 00030,000 units. Ward currently manufactures the side burners for their grills. Each grill includes two side burners. Ward's management accountant reports the following costs to manufacture the 60 point 00060,000 burners:

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	Cost per unit	Cost per 60,000 Units
Direct materials	$6.25	$375,000
Direct manufacturing labor	2.40	144.000
Variable manufacturing overhead	0,95	57,000
Inspection, setup, material handling		6,900
Machine rental		5,000
Allocated fixed costs of plant administration, taxes and insurance		70.000
total costs		$ 657,900

Ward has received an offer from a third party supplier to supply any number of burners Ward requires in

$9.50$9.50 per burner. The following additional information is available:

?(Click to see the information)Read the requirements

	Cost per unit	Cost per 60,000 Units
Direct materials	$6.25	$375,000
Direct manufacturing labor	2.40	144.000
Variable manufacturing overhead	0,95	57,000
Inspection, setup, material handling		6,900
Machine rental		5,000
Allocated fixed costs of plant administration, taxes and insurance		70.000
total costs		$ 657,900

.

Requirement 1. Suppose if Ward purchases the burners from outside. supplier, the facility where the burners are currently manufactured will remain inactive. Based on financial considerations alone, should Ward accept the exterior supplier's offer in the expected volume of 60 comma 00060,000 burners Show your calculations. (If a box is not used in the table, leave the box empty; do not enter a zero.)

	Do	Comprar
Total relevant costs

Answer rating: 100% (QA)

Here are the calculations to determine if Ward should ac... View the full answer