3. Syanton manufactures a particular computer component. Manufacturing cost per units are as follows: Direct materials P50 500 Direct labor Variable overhead Fixed overhead 250 _ 400 P1,200 Total manufacturing costs Fredix, Inc. has contracted Syanton with an offer to sell 10,000 of the component for P1,100 per unit. If Syanton accepts the proposals, P2,500,000 of the fixed overhead will be eliminated. Should Syanton make or buy the component and why? a. Buy due to savings of P1,000,000 b. Make due to savings of P500,000 c. Buy due to savings of P2,500,000 d. Make due to savings of P3,000,000
3. Syanton manufactures a particular computer component. Manufacturing cost per units are as follows: Direct materials P50 500 Direct labor Variable overhead Fixed overhead 250 _ 400 P1,200 Total manufacturing costs Fredix, Inc. has contracted Syanton with an offer to sell 10,000 of the component for P1,100 per unit. If Syanton accepts the proposals, P2,500,000 of the fixed overhead will be eliminated. Should Syanton make or buy the component and why? a. Buy due to savings of P1,000,000 b. Make due to savings of P500,000 c. Buy due to savings of P2,500,000 d. Make due to savings of P3,000,000
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:3. Syanton manufactures a particular computer component. Manufacturing cost per units are as follows:
Direct materials
Direct labor
P50
500
250
400
P1,200
Variable overhead
Fixed overhead
Total manufacturing costs
Fredix, Inc. has contracted Syanton with an offer to sell 10,000 of the component for P1,100 per unit. If
Syanton accepts the proposals, P2,500,000 of the fixed overhead will be eliminated. Should Syanton
make or buy the component and why?
a. Buy due to savings of P1,000,000
b. Make due to savings of P500,000
c. Buy due to savings of P2,500,000
d. Make due to savings of P3,000,000
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