IT Company is operating at 70% capacity. The plant manager is considering making Part ROQ now being purchased from outside supplier for P110 each, a price that is projected to increase in the near future. The plant has the equipment and labor force required to manufacture Part ROQ. The designer engineer estimates that each part requires P40 of direct materials and P30 of direct labor. The plant overhead is 200% of direct labor peso cost, and 40% of the overhead is fixed cost. A decision to manufacture Part ROQ will result in a gain or (loss) for each component of: A.P26 B.P16 C.(P20) D.P4
IT Company is operating at 70% capacity. The plant manager is considering making Part ROQ now being purchased from outside supplier for P110 each, a price that is projected to increase in the near future. The plant has the equipment and labor force required to manufacture Part ROQ. The designer engineer estimates that each part requires P40 of direct materials and P30 of direct labor. The plant overhead is 200% of direct labor peso cost, and 40% of the overhead is fixed cost. A decision to manufacture Part ROQ will result in a gain or (loss) for each component of: A.P26 B.P16 C.(P20) D.P4
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 3CMA: Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each...
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IT Company is operating at 70% capacity. The plant manager is considering making Part ROQ now being purchased from outside supplier for P110 each, a price that is projected to increase in the near future. The plant has the equipment and labor force required to manufacture Part ROQ. The designer engineer estimates that each part requires P40 of direct materials and P30 of direct labor. The plant overhead is 200% of direct labor peso cost, and 40% of the overhead is fixed cost. A decision to manufacture Part ROQ will result in a gain or (loss) for each component of:
A.P26
B.P16
C.(P20)
D.P4
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