Ahsan Company makes 60,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost = $10.60 $15.20 $2.10 $12.60 $40.50 An outside supplier has offered to sell the company all of these parts it needs for $45.70 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contributions margin on this other pm duct would be $318,000 per year. If the part were purchased from the outside supplier, all of the direct labor costs of the part would be avoided. However, $3.50 of the fixed manufacturing overhead cost being applied to the part would continue even if the part was purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products. How much of the unit product cost of $40.50 is relevant in the decision of whether to make or buy the pan? a. $40.50 b. $15.20 c. $27.90 d. $37.00

Ahsan Company makes 60,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost = $10.60 $15.20 $2.10 $12.60 $40.50 An outside supplier has offered to sell the company all of these parts it needs for $45.70 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contributions margin on this other pm duct would be $318,000 per year. If the part were purchased from the outside supplier, all of the direct labor costs of the part would be avoided. However, $3.50 of the fixed manufacturing overhead cost being applied to the part would continue even if the part was purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products. How much of the unit product cost of $40.50 is relevant in the decision of whether to make or buy the pan? a. $40.50 b. $15.20 c. $27.90 d. $37.00

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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Please provide the introductory part and answer for question D.
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please answer this which is part C
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