Florida Company is presently making part SUN that is used in one of its products. A total of 17,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Direct materials: Direct labor Variable manufacturing overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Mutiple Choice Per Unit $ 3.80 $ 3.80 An outside supplier has offered to make and sell the part to the company for $20.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. If management decides to buy part SUN from the outside supplier rather than to continue making the part, what would be the annual impact on the company's overall net operating income? ($6.800) $ 1.10 $ 2.50 $ 1.40 $ 8.60

Florida Company is presently making part SUN that is used in one of its products. A total of 17,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Direct materials: Direct labor Variable manufacturing overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Mutiple Choice Per Unit $ 3.80 $ 3.80 An outside supplier has offered to make and sell the part to the company for $20.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. If management decides to buy part SUN from the outside supplier rather than to continue making the part, what would be the annual impact on the company's overall net operating income? ($6.800) $ 1.10 $ 2.50 $ 1.40 $ 8.60

Name: h Multiple ChoiceOOOO($6,800)($163,200)$163,200$6,800 Florida Company
Uploaded: 2024-03-20T06:32:49.000Z
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Description: h Multiple ChoiceOOOO($6,800)($163,200)$163,200$6,800 Florida Company is presently making part SUN that is used in one of its products. A total of 17,000 units of this part are produced and used every year. Thecompany's Accounting Department reports

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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