Help Save & Ex A company makes 30,000 units of a part each year. At this level of production, the company's cost per unit for this part are as follows: Direct materials $16 Direct labor 10 Variable manufacturing overhead 4 Fixed manufacturing overhead Total cost per unit $38 An outside supplier has offered to sell the company 30,000 parts per year for a price of $33 per part. The company's analysis indicates that $157,800 of the fixed manufacturing overhead cost being allocated to this part will continue to be incurred even if the part is purchased from the outside supplier. What is the financial advantage (disadvantage) of buying the parts from the outside supplier?

Help Save & Ex A company makes 30,000 units of a part each year. At this level of production, the company's cost per unit for this part are as follows: Direct materials $16 Direct labor 10 Variable manufacturing overhead 4 Fixed manufacturing overhead Total cost per unit $38 An outside supplier has offered to sell the company 30,000 parts per year for a price of $33 per part. The company's analysis indicates that $157,800 of the fixed manufacturing overhead cost being allocated to this part will continue to be incurred even if the part is purchased from the outside supplier. What is the financial advantage (disadvantage) of buying the parts from the outside supplier?

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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