49. The Camel Company produces 12,000 units of item Roto 454 annually at a total cost of $270,000. Direct materials 40,000 Direct labor 75,000 Variable overhead 65,000 Fixed overhead 90,000 Total 270,000 The Yukon Company has offered to supply 12,000 units of Roto 454 per year for $20 per unit. If Camel accepts the offer, $4 per unit of the fixed overhead would be saved. In addition, some of Camel's facilities could be rented to a third party for $17,000 per year. What are the relevant costs for the "make" alternative? %24 %24

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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49. The Camel Company produces 12,000 units of item Roto 454 annually at a total cost of
$270,000.
Direct materials
40,000
Direct labor
75,000
Variable overhead
65,000
Fixed overhead
90,000
Total
$
270,000
The Yukon Company has offered to supply 12,000 units of Roto 454 per year for $20 per unit. If
Camel accepts the offer, $4 per unit of the fixed overhead would be saved. In addition, some of
Camel's facilities could be rented to a third party for $17,000 per year. What are the relevant costs
for the "make" alternative?
%24
%24
Transcribed Image Text:49. The Camel Company produces 12,000 units of item Roto 454 annually at a total cost of $270,000. Direct materials 40,000 Direct labor 75,000 Variable overhead 65,000 Fixed overhead 90,000 Total $ 270,000 The Yukon Company has offered to supply 12,000 units of Roto 454 per year for $20 per unit. If Camel accepts the offer, $4 per unit of the fixed overhead would be saved. In addition, some of Camel's facilities could be rented to a third party for $17,000 per year. What are the relevant costs for the "make" alternative? %24 %24
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