Question: Xia Co. currently buys a component part for $7 per unit. Xia believes that making the part would require $230 per unit of direct materials

Xia Co. currently buys a component part for $7 per unit. Xia believes that making the part would require $230 per unit of direct materials and $1.00 per unit of direct labor. Xia allocates overhead using a predetermined overhead rate of 235% of direct labor cost Xia estimates an incremental overhead rate of $070 per unit to make the part: 1-a. What are the relevant costs for Xia to make or buy the part? 1-b. Should Xia make or buy the part? Complete this question by entering your answers in the tabs below. What are the relevant costif for Xia to make or buy the part? (round your answers to 2 decimal places-) Xia Co. currently buys a component part for $7 per unit. Xia believes that making the part would require $2.30 per unit of direct materials and $1.00 per unit of direct labor. Xia allocates overhead using a predetermined overhead rate of 235% of direct labor cost. Xia estimates an incremental overhead rate of $0.70 per unit to make the part. 1-a. What are the relevant costs for Xia to make or buy the part? 1-b. Should Xia make or buy the part? Complete this question by entering your answers in the tabs below. Should X ta make of bury the part
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
