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Gelb Company currently manufactures 47,500 units per year of a key component for its manufacturing process. Variable costs are $4.05 per unit, fixed costs related to making this component are $71,000 per year, and allocated fixed costs are $74,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 47,500 units and buying 47,500 units. Should it continue to manufacture the component. or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 47,500 units. (Round "variable cost per unit" answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Unit Variable cost per unit Fixed manufacturing costs Total incremental cost to make Relevant Fixed Costs

Gelb Company currently manufactures 47,500 units per year of a key component for its manufacturing process. Variable costs are $4.05 per unit, fixed costs related to making this component are $71,000 per year, and allocated fixed costs are $74,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 47,500 units and buying 47,500 units. Should it continue to manufacture the component. or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 47,500 units. (Round "variable cost per unit" answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Unit Variable cost per unit Fixed manufacturing costs Total incremental cost to make Relevant Fixed Costs

FINANCIAL ACCOUNTING
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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Exercise 23-2 Make or buy LO P1 Gelb Company currently manufactures 47,500 units per year of a key component for its manufacturing process. Variable costs are $4.05 per unit, fixed costs related to making this component are $71,000 per year, and allocated fixed costs are $74,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 47,500 units and buying 47,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 47,500 units. (Round "variable cost per unit" answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Unit Variable cost per unit Fixed manufacturing costs Total incremental cost to make Relevant Fixed Costs <Costs to Make Total Relevant Costs Costs to Buy >
Transcribed Image Text:Exercise 23-2 Make or buy LO P1 Gelb Company currently manufactures 47,500 units per year of a key component for its manufacturing process. Variable costs are $4.05 per unit, fixed costs related to making this component are $71,000 per year, and allocated fixed costs are $74,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.70 per unit. Calculate the total incremental cost of making 47,500 units and buying 47,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 47,500 units. (Round "variable cost per unit" answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Unit Variable cost per unit Fixed manufacturing costs Total incremental cost to make Relevant Fixed Costs <Costs to Make Total Relevant Costs Costs to Buy >
Complete this question by entering your answers in the tabs below. Outside Supplier Calculate the total incremental cost of buying 47,500 units. (Round "purchase price per unit" answers to 2 decimal places.). Incremental Costs to Buy Relevant Amount per Unit Costs to Make Costs to Buy Purchase price per unit Total incremental cost to buy Relevant Fixed Costs Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Total Relevant Costs Outside Supplier Should it continue to manufacture the component, or should it buy this component from the outside supplier? Should Gelb make the part or purchase it from the outside supplier? Buy
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Outside Supplier Calculate the total incremental cost of buying 47,500 units. (Round "purchase price per unit" answers to 2 decimal places.). Incremental Costs to Buy Relevant Amount per Unit Costs to Make Costs to Buy Purchase price per unit Total incremental cost to buy Relevant Fixed Costs Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Total Relevant Costs Outside Supplier Should it continue to manufacture the component, or should it buy this component from the outside supplier? Should Gelb make the part or purchase it from the outside supplier? Buy
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