Question: Xia Co. currently buys a component part for $8 per unit. Xia believes that making the part would require $5.35 per unit of direct materials

 Xia Co. currently buys a component part for $8 per unit.
Xia believes that making the part would require $5.35 per unit of

Xia Co. currently buys a component part for $8 per unit. Xia believes that making the part would require $5.35 per unit of direct materials and $1.05 per unit of direct labor. Xia allocates overhead using a predetermined overhead rate of 245% of direct labor cost. Xia estimates an incremental overhead rate of $0.60 per unit to make the part. 1-a. What are the relevant costs for Xia to make or buy the part? (Round your answers to 2 decimal places.) Per Unit Make Buy 1-b. Should Xia make or buy the part? O Make O Buy At the beginning of the year, a company predicts total overhead costs of $810,900. The company applies overhead using machine hours and estimates it will use 1,530 machine hours during the year. What amount of overhead should be applied to Job 65A if that job uses 26 machine hours during January? Overhead applied to Job 65A

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!