1.25/2 points awarded Scored Part a (Static) Make or Buy Terry Incorporated manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 2,000 units of product OP89 for $120,000. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs: Direct materials Direct labor Variable overhead Allocated fixed overhead Required: Cost per Unit $ 28 18 16 1. What is the relevant cost per unit to make the product internally? 2. What is the estimated increase or decrease in short-term operating profit of producing the product Internally versus purchasing the product from a supplier? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the relevant cost per unit to make the product internally? Relevant Cost Per Unit Direct materials $ 35 Direct labor 28 Variable overhead 16 Allocated fixed overhead 4 Total relevant cost 83 "Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

1.25/2 points awarded Scored Part a (Static) Make or Buy Terry Incorporated manufactures machine parts for aircraft engines. CEO Bucky Walters is considering an offer from a subcontractor to provide 2,000 units of product OP89 for $120,000. If Terry does not purchase these parts from the subcontractor, it must continue to produce them in-house with these costs: Direct materials Direct labor Variable overhead Allocated fixed overhead Required: Cost per Unit $ 28 18 16 1. What is the relevant cost per unit to make the product internally? 2. What is the estimated increase or decrease in short-term operating profit of producing the product Internally versus purchasing the product from a supplier? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the relevant cost per unit to make the product internally? Relevant Cost Per Unit Direct materials $ 35 Direct labor 28 Variable overhead 16 Allocated fixed overhead 4 Total relevant cost 83 "Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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