Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 70,000units of RX5 follows.Direct materialsDirect labor$5.009.0010.00OverheadTotal costs per unit.$24.00Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the 70,000 unitsof RX5 for $19.00 per unit.Required:1. Determine the total incremental cost of making 70,000 units of RX5.2. Determine the total incremental cost of buying 70,000 units of RX5.3. Should the company make or buy RX5?Complete this question by entering your answers in the tabs below.Required 1 Required 2Required 3Determine the total incremental cost of making 70,000 units of RX5.Incremental cost of making RX5Making the unitsTotal incremental cost of making 70,000 unitsRequired 2 >Required 1 Required 2Required 3Determine the total incremental cost of buying 70,000 units of RX5.Incremental cost of buying RX5Buying the unitsTotal incremental cost of buying 70,000 unitsRequired 1Required 2Required 3Assessment Tool iFrameShould the company make or buy RX5?Should the company make or buy RX5?< Required 1< Required 1Required 3 >< Required 2Req

Incremental Cost is the cost which is incurred due to the production of additional units of the…

Answered: 1. Determine the total incremental cost…

1. Determine the total incremental cost of making 70,000 units of RX5. 2. Determine the total incremental cost of buying 70,000 units of RX5. 3. Should the company make or buy RX5?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...

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Haver Company currently produces component RX5 for one of its products. The current cost per unit to manufacture the required 50,000 units of RX5 follows. Direct materials $ 5.00 Direct labor 8.00 Overhead . 9.00 Total cost per unit $22.00 Check (1) Incremental cost to make RX5, $740,000 Direct materials and direct labor are 100% variable. Overhead is 80% fixed. An outside supplier has offered to supply the 50,000 units of RX5 for $18.00 per unit. Required 1. Determine the total incremental cost of making 50,000 units of RX5. 2. Determine the total incremental cost of buying 50,000 units of RX5. 3. Should the company make or buy RX5?