Direct materials Direct labor Variable manufacturing overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Multiple Choice An outside vendor has offered to sell the part to the company for $31.50 each. If this offer is accepted, the supervisor's salary and all of the variable costs can be avoided. The special equipment used to make the part has no salvage value or other use. None of the allocated general overhead would be avoided if the part were purchased. Also, the space used to make the part could be used to make more of one of the company's other products, generating an additional segment margin of $33,500 per year. The financial advantage (disadvantage) for the company as a result of buying the part should be: ($28,850) ($127,750) $33,500 Per Unit $4.60 $9.20 $9.70 ($206,400) $5.10 $3.50 $8.70

Direct materials Direct labor Variable manufacturing overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Multiple Choice An outside vendor has offered to sell the part to the company for $31.50 each. If this offer is accepted, the supervisor's salary and all of the variable costs can be avoided. The special equipment used to make the part has no salvage value or other use. None of the allocated general overhead would be avoided if the part were purchased. Also, the space used to make the part could be used to make more of one of the company's other products, generating an additional segment margin of $33,500 per year. The financial advantage (disadvantage) for the company as a result of buying the part should be: ($28,850) ($127,750) $33,500 Per Unit $4.60 $9.20 $9.70 ($206,400) $5.10 $3.50 $8.70

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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