Every year Cheyenne Industries manufactures 8,000 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total Pharoah, Inc., has offered to sell 8,000 units of part 231 to Cheyenne for $32 per unit. If Cheyenne accepts Pharoah's offer, its freed-up facilities could be used to earn $13,700 in contribution margin by manufacturing part 240. In addition, Cheyenne would eliminate 40% of the fixed overhead applied to part 231. (a) $3.00 9.00 7.00 10.00 $29.00 Your answer is partially correct. Calculate total relevant cost to make and net cost to buy. Total relevant cost to make $ Net relevant cost to buy $ 120000 242300 I SUPE
Every year Cheyenne Industries manufactures 8,000 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total Pharoah, Inc., has offered to sell 8,000 units of part 231 to Cheyenne for $32 per unit. If Cheyenne accepts Pharoah's offer, its freed-up facilities could be used to earn $13,700 in contribution margin by manufacturing part 240. In addition, Cheyenne would eliminate 40% of the fixed overhead applied to part 231. (a) $3.00 9.00 7.00 10.00 $29.00 Your answer is partially correct. Calculate total relevant cost to make and net cost to buy. Total relevant cost to make $ Net relevant cost to buy $ 120000 242300 I SUPE
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning