X Company is considering buying a part next year that they currently make. This year's total...
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X Company is considering buying a part next year that they currently make. This year's total production costs for 83,000 units of this part were: Materials $523,730 Direct labor 356,070 Variable overhead 346,940 Fixed overhead 87,150 Total $1,313,890 A company has offered to supply this part for $15.09 per unit. If X Company buys the part, $41,832 of the total fixed overhead is avoidable, but there is no alternative use of the resources that will become idle. Production next year is expected to be 87,850 units. If X Company buys the part instead of continuing to make it, it will save X Company is considering buying a part next year that they currently make. This year's total production costs for 83,000 units of this part were: Materials $523,730 Direct labor 356,070 Variable overhead 346,940 Fixed overhead 87,150 Total $1,313,890 A company has offered to supply this part for $15.09 per unit. If X Company buys the part, $41,832 of the total fixed overhead is avoidable, but there is no alternative use of the resources that will become idle. Production next year is expected to be 87,850 units. If X Company buys the part instead of continuing to make it, it will save
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Relevant Cost Make Buy Difference A AA 554334 A 55433... 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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