X Company is considering buying a part next year that theycurrently make. This year's production costs for 3,100 unitswere:
Total Per-Unit Direct materials $11,842 $3.82 Direct labor 12,121 3.91 Variable overhead 13,330 4.30 Fixed overhead 12,090 3.90 Total $49,383 $15.93
A company has offered to supply this part for $14.44 per unit. If XCompany buys the part, $6,650 of the fixed overhead can be avoided.Also if X Company buys the part, it can use the freed-up resourcesto increase production of another product, resulting in additionalcontribution margin of $2,200. Production next year is expected tobe 3,400 units.
2. If X Company buys the part instead of making it, it willsave
3. X Company is uncertain what production will be next year.What production level would make X Company indifferent betweenmaking and buying the part?
X Company is considering buying a part next year that theycurrently make. This year's production costs for 3,100 unitswere:
| Total | Per-Unit | ||
| Direct materials | $11,842 | $3.82 | |
| Direct labor | 12,121 | 3.91 | |
| Variable overhead | 13,330 | 4.30 | |
| Fixed overhead | 12,090 | 3.90 | |
| Total | $49,383 | $15.93 | |
A company has offered to supply this part for $14.44 per unit. If XCompany buys the part, $6,650 of the fixed overhead can be avoided.Also if X Company buys the part, it can use the freed-up resourcesto increase production of another product, resulting in additionalcontribution margin of $2,200. Production next year is expected tobe 3,400 units.
2. If X Company buys the part instead of making it, it willsave
3. X Company is uncertain what production will be next year.What production level would make X Company indifferent betweenmaking and buying the part?
Related questions
X Company is considering buying a part next year that theycurrently make. This year's total production costs for 3,100 unitsof this part were:
| Materials | $11,129 |
| Direct labor [all variable] | 10,788 |
| Variable overhead | 7,750 |
| Fixed overhead | 11,160 |
| Total | $40,827 |
A company has offered to supply this part for $10.75 per unit. If XCompany buys the part, $6,361 of the fixed overhead can beavoided.
14. If production next year is expected to be the same as thisyear, how much can X Company save by buying the part instead ofmaking it?
| Tries 0/3 |
15. If production next year is expected to be 3,600 units, how muchcan X Company save by buying the part instead of making it?
| Tries 0/3 |
X Company is considering buying a part next year that theycurrently make. This year's total production costs for 3,200 unitsof this part were:
| Materials | $8,480 |
| Direct labor [all variable] | 11,520 |
| Variable overhead | 13,120 |
| Fixed overhead | 13,120 |
| Total | $46,240 |
A company has offered to supply this part for $11.37 per unit. If XCompany buys the part, $6,560 of the fixed overhead can beavoided.
14. If production next year is expected to be the same as thisyear, how much can X Company save by buying the part instead ofmaking it?
15. If production next year is expected to be 3,600 units, howmuch can X Company save by buying the part instead of makingit?
Please fill in the blank
Question 14 :( )
Question 15:( )
thanks!
X Company is considering buying a part next year that theycurrently make. This year's total production costs for 3,200 unitsof this part were:
| Materials | $8,480 |
| Direct labor [all variable] | 11,520 |
| Variable overhead | 13,120 |
| Fixed overhead | 13,120 |
| Total | $46,240 |
A company has offered to supply this part for $11.37 per unit. If XCompany buys the part, $6,560 of the fixed overhead can beavoided.
14. If production next year is expected to be the same as thisyear, how much can X Company save by buying the part instead ofmaking it?
15. If production next year is expected to be 3,600 units, howmuch can X Company save by buying the part instead of makingit?
Please fill in the blank
Question 14 :( )
Question 15:( )
thanks!
