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Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 61,000 units of RX5 follows. Direct materials Direct labor Overhead Total costs per unit $5.00 9.00 10.00 $24.00 Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 61,000 units of RX5 for $19.00 per unit. Required: 1. Determine the total incremental cost of making 61,000 units of RX5. 2. Determine the total incremental cost of buying 61,000 units of RX5. 3. Should the company make or buy RX5?

Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 61,000 units of RX5 follows. Direct materials Direct labor Overhead Total costs per unit $5.00 9.00 10.00 $24.00 Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 61,000 units of RX5 for $19.00 per unit. Required: 1. Determine the total incremental cost of making 61,000 units of RX5. 2. Determine the total incremental cost of buying 61,000 units of RX5. 3. Should the company make or buy RX5?

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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Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 61,000 units of RX5 follows. Direct materials Direct labor Overhead Total costs per unit Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 61,000 units of RX5 for $19.00 per unit. $ 5.00 9.00 10.00 $24.00 Required: 1. Determine the total incremental cost of making 61,000 units of RX5. 2. Determine the total incremental cost of buying 61,000 units of RX5. 3. Should the company make or buy RX5? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Incremental cost of making RX5 Required 3 Determine the total incremental cost of making 61,000 units of RX5. Total incremental cost of making 61,000 units Making the units < Required 1 Required 2 >
Transcribed Image Text:Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 61,000 units of RX5 follows. Direct materials Direct labor Overhead Total costs per unit Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 61,000 units of RX5 for $19.00 per unit. $ 5.00 9.00 10.00 $24.00 Required: 1. Determine the total incremental cost of making 61,000 units of RX5. 2. Determine the total incremental cost of buying 61,000 units of RX5. 3. Should the company make or buy RX5? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Incremental cost of making RX5 Required 3 Determine the total incremental cost of making 61,000 units of RX5. Total incremental cost of making 61,000 units Making the units < Required 1 Required 2 >
Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 61,000 units of RX5 follows. Direct materials Direct labor Overhead Total costs per unit Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 61,000 units of RX5 for $19.00 per unit. Required: 1. Determine the total incremental cost of making 61,000 units of RX5. 2. Determine the total incremental cost of buying 61,000 units of RX5. 3. Should the company make or buy RX5? $ 5.00 9.00 10.00 $24.00 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the total incremental cost of buying 61,000 units of RX5. Incremental cost of buying RX5 Total incremental cost of buying 61,000 units Direct materials Direct labor Overhead Total costs per unit Haver Company currently produces component RX5 for its sole prodott. The current cost per unit to manufacture the required 61,000 units of RX5 follows. $ 5.00 9.00 10.00 $24.00 Required 1 Buying the units Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 61,000 units of RX5 for $19.00 per unit. < Required 1 Required: 1. Determine the total incremental cost of making 61,000 units of RX5. 2. Determine the total incremental cost of buying 61,000 units of RX5. 3. Should the company make or buy RX5? Required 2 Required 3 Complete this question by entering your answers in the tabs below. Should the company make or buy RX5? Required 3 > Should the company make or buy RX5? < Required 2 Required 3 >
Transcribed Image Text:Haver Company currently produces component RX5 for its sole product. The current cost per unit to manufacture the required 61,000 units of RX5 follows. Direct materials Direct labor Overhead Total costs per unit Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 61,000 units of RX5 for $19.00 per unit. Required: 1. Determine the total incremental cost of making 61,000 units of RX5. 2. Determine the total incremental cost of buying 61,000 units of RX5. 3. Should the company make or buy RX5? $ 5.00 9.00 10.00 $24.00 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the total incremental cost of buying 61,000 units of RX5. Incremental cost of buying RX5 Total incremental cost of buying 61,000 units Direct materials Direct labor Overhead Total costs per unit Haver Company currently produces component RX5 for its sole prodott. The current cost per unit to manufacture the required 61,000 units of RX5 follows. $ 5.00 9.00 10.00 $24.00 Required 1 Buying the units Direct materials and direct labor are 100% variable. Overhead is 70% fixed. An outside supplier has offered to supply the 61,000 units of RX5 for $19.00 per unit. < Required 1 Required: 1. Determine the total incremental cost of making 61,000 units of RX5. 2. Determine the total incremental cost of buying 61,000 units of RX5. 3. Should the company make or buy RX5? Required 2 Required 3 Complete this question by entering your answers in the tabs below. Should the company make or buy RX5? Required 3 > Should the company make or buy RX5? < Required 2 Required 3 >
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