In a make or buy decision relevant costs include
a. Avoidable fixed cost
b. Fixed factory overheads costs applied to products
c. Fixed selling and administrative expense
d. Unavoidable fixed costs
In a make or buy decision relevant costs include
a. Avoidable fixed cost
b. Fixed factory overheads costs applied to products
c. Fixed selling and administrative expense
d. Unavoidable fixed costs
Related questions
Gilberto Company currently manufactures 60,000 units per year ofone of its crucial parts. Variable costs are $1.60 per unit, fixedcosts related to making this part are $60,000 per year, andallocated fixed costs are $30,000 per year. Allocated fixed costsare unavoidable whether the company makes or buys the part.Gilberto is considering buying the part from a supplier for aquoted price of $2.80 per unit guaranteed for a three-yearperiod.
Calculate the total incremental cost of making 60,000 and buying60,000 units. Should the company continue to manufacture the part,or should it buy the part from the outside supplier?
Calculate the total incremental cost of making 60,000 units.(Round cost per unit answer to 2 decimal places.)
| |||||||||||||||||||||||||
Calculate the total incremental cost of buying 60,000 units.(Round cost per unit answer to 2 decimal places.)
| |||||||||||||||||||||||||
Should the company continue to manufacture the part, or shouldit buy the part from the outside supplier?
|
