Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 61,000 units of RX5 follows.
Direct materials $ 4.00
Direct labor 8.00
Overhead 9.00
Total costs per unit $ 21.00
Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the 61,000 units of RX5 for $19.00 per unit.
Required:
Calculate the incremental costs of making and buying component RX5.
Total incremental costs of: Making the units Buying the units
Total direct materials $244,000
Total direct labor 488,000
Variable overhead costs 109,800
Cost to buy the units
Total costs $841,800
Should the company continue to manufacture the part, or should it buy the part from the outside supplier?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 61,000 units of ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Which of the following statements is false? Multiple Choice Prepaid insurance is a deferred expense. Prepaid insurance represents a future economic benefit. Prepaid insurance is shown on the income statement.
Answers (1)
If you travel thirty minutes to work each day and work five days a week, what is your weekly commute time? 30 minutes 5 hours 2.5 hours none of the above
Answers (1)
There are 66 employees in a certain firm. We know that 40 of these employees are male, 6 of these males are secretaries, and 19 secretaries are employed by the firm.
Answers (1)
Kimberly Payne and Arionna Maples decide to form a partnership by combining the assets of their separate businesses.
Answers (1)
Assuming giftedness is defined only as scoring in the range of two standard deviations or more above the mean on an intelligence test, about what percent of children are gifted?
Answers (1)
New Questions in Business
A letter of credit: a. Ensures a company that funds will be available when needed b. Is analogous to a credit card that companies can draw on as needed c. Is a representation that a company has a high credit rating d.
Answers (1)
In a business organization, the splitting of management and ownership into two distinct functions is an example of a (n)
Answers (1)
Alan Jackson invests $20,000 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 8 years. At the end of the 8 years, Alan withdraws the accumulated amount of money.
Answers (1)
Will Jones, LLP is a small CPA firm that focuses primarily on preparing tax returns for small businesses. The company pays a $500 annual fee plus $10 per tax return for a license to use Mega Tax software.
Answers (1)
Which strategy is most likely to improve most people's financial situation over a lifetime? A. using a credit to spend more than a person. B. making financial decisions quickly based on intuition. C.
Answers (1)