Alanco, Incl manufactures a variety of products and is currently maunfacturing all of its own component parts. 2 An outside supplier has offered to sell one of those components to Alanco. To evaluate this offer, the following 3 information has been gathered relating to the cost of producing the component internally: 4 5 Direct materials 6 Direct labor 7 Variable manufacturing overhead 4.00 6.00 2.00

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Chapter1: Financial Statements And Business Decisions
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Alanco Inc. manufactures a veriety of products and is currently manufacturing all of its own component parts.

 

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1 Alanco, Ind manufactures a variety of products and is currently maunfacturing all of its own component parts.
2 An outside supplier has offered to sell one of those components to Alanco. To evaluate this offer, the following
3 information has been gathered relating to the cost of producing the component internally:
4
5 Direct materials
6 Direct labor
7 Variable manufacturing overhead
8 Fixed manufacturing overhead, traceable*
9 Fixed manufacturing overhead, common but allocated
10 Total cost
$
4.00
6.00
2.00
5.00
8.00
25.00
11
12 Supplier price
21.00
13
14 Units used per year
12,000
15
16 *Fixed manufacturing overhead, traceable is composed of two items:
17
30%
Depreciation of equipment (no resale value)
Supervisor salary
18
70%
19
20 1. Assuming the company has no alternative use for the facilities now being used to produce the
21 component, complete the following analysis to determine if the outside supplier's offer should be accepted.
22
23
Per Unit Differential Cost
12,000 units
24
Make
Buy
Make
Buy
25
26 Cost of purchasing
27 Direct materials
28 Direct labor
29 Variable manufacturing overhead
30 Fixed manufacturing overhead, traceable
31 Fixed manufacturing overhead, common
32 Total costs
33
34 Based on this analysis, write an if statement to determine if Alanco should make or buy the component.
35
36
Alanco should
the component
37
38
39
40
Transcribed Image Text:1 Alanco, Ind manufactures a variety of products and is currently maunfacturing all of its own component parts. 2 An outside supplier has offered to sell one of those components to Alanco. To evaluate this offer, the following 3 information has been gathered relating to the cost of producing the component internally: 4 5 Direct materials 6 Direct labor 7 Variable manufacturing overhead 8 Fixed manufacturing overhead, traceable* 9 Fixed manufacturing overhead, common but allocated 10 Total cost $ 4.00 6.00 2.00 5.00 8.00 25.00 11 12 Supplier price 21.00 13 14 Units used per year 12,000 15 16 *Fixed manufacturing overhead, traceable is composed of two items: 17 30% Depreciation of equipment (no resale value) Supervisor salary 18 70% 19 20 1. Assuming the company has no alternative use for the facilities now being used to produce the 21 component, complete the following analysis to determine if the outside supplier's offer should be accepted. 22 23 Per Unit Differential Cost 12,000 units 24 Make Buy Make Buy 25 26 Cost of purchasing 27 Direct materials 28 Direct labor 29 Variable manufacturing overhead 30 Fixed manufacturing overhead, traceable 31 Fixed manufacturing overhead, common 32 Total costs 33 34 Based on this analysis, write an if statement to determine if Alanco should make or buy the component. 35 36 Alanco should the component 37 38 39 40
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What is the equation for Fixed MFG Over head, traceable? What is the equation for Fixed MFG Overhead, Common? 

also can you help with the IF Statement? 

 

33
34 Based on this analysis, write an if statement to determine if Alanco should make or buy the component.
35
36
37
38
Alanco should
the component
Transcribed Image Text:33 34 Based on this analysis, write an if statement to determine if Alanco should make or buy the component. 35 36 37 38 Alanco should the component
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