A company makes 36,000 motors to be used in the production of its blender. The average cost per motor at this level of activity is: Direct materials $ 9.50 Direct labor $ 8.50 Variable manufacturing overhead $ 3.45 $4.40 Fixed manufacturing overhead An outside supplier recently began producing a comparable motor that could be used in the blender. The price offered to the company for this motor is $23.95. There would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be: Multiple Choice ($68,400) $214,200 90,000 $158,400

A company makes 36,000 motors to be used in the production of its blender. The average cost per motor at this level of activity is: Direct materials $ 9.50 Direct labor $ 8.50 Variable manufacturing overhead $ 3.45 $4.40 Fixed manufacturing overhead An outside supplier recently began producing a comparable motor that could be used in the blender. The price offered to the company for this motor is $23.95. There would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be: Multiple Choice ($68,400) $214,200 90,000 $158,400

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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