Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.70 for direct materials and $1.25 for direct labor. Incremental overhead to make this part is $1.60 per unit. The company can buy the part for $4.80 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Make Buy Cost difference (b) Company should:

Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.70 for direct materials and $1.25 for direct labor. Incremental overhead to make this part is $1.60 per unit. The company can buy the part for $4.80 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Make Buy Cost difference (b) Company should:

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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