Gent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4,000 units were produced: Direct materials $4.00 Direct labor 1.40 Manufacturing overhead 1.20 Total $6.60 Variable manufacturing overhead is applied at $1.00 per unit. The other $0.20 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next year's production. Cory Corporation has offered to supply 6,000 units of part A at a price of $6.80 per unit. If Gent accepts the offer, all of the variable costs and $800 of the fixed costs will be avoided. A. Calculate the differential cost? Cost to buy $ Cost to make Differential cost B. Should Gent Designs accept the offer from Cory

Gent Designs requires three units of part A for every unit of A1 that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4,000 units were produced: Direct materials $4.00 Direct labor 1.40 Manufacturing overhead 1.20 Total $6.60 Variable manufacturing overhead is applied at $1.00 per unit. The other $0.20 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next year's production. Cory Corporation has offered to supply 6,000 units of part A at a price of $6.80 per unit. If Gent accepts the offer, all of the variable costs and $800 of the fixed costs will be avoided. A. Calculate the differential cost? Cost to buy $ Cost to make Differential cost B. Should Gent Designs accept the offer from Cory

Name: Gent Designs requires three units of part A for every unit ofA1 that
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Description: Gent Designs requires three units of part A for every unit ofA1 that it produces. Currently, part A is made by Gent, withthese per-unit costs in a month when 4,000 units wereproduced:Direct materials$4.00Direct labor1.40Manufacturing overhead1.20Tot

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

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...

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