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Kando Company currently pays $18 per unit to buy a part for a product it manufactures. Instead, Kendo could make the port for per unit costs of $B for direct moterials, $5 for direct lobor, and $2 for incremental overhead. Kando normally opplies overhead costs using o predetermined rate of 200% of direct labor cost (e) Prepare a moke or buy analysis of costs for this part. (b) Should Kando make or buy the port? Direct materials Direct labor Overhead Cost to buy Cost per und Company should Make Buy

Kando Company currently pays $18 per unit to buy a part for a product it manufactures. Instead, Kendo could make the port for per unit costs of $B for direct moterials, $5 for direct lobor, and $2 for incremental overhead. Kando normally opplies overhead costs using o predetermined rate of 200% of direct labor cost (e) Prepare a moke or buy analysis of costs for this part. (b) Should Kando make or buy the port? Direct materials Direct labor Overhead Cost to buy Cost per und Company should Make Buy

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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Kando Company currently pays $18 per unit to buy a part for a product it manufactures. Instead, Kendo could make the part for per unit costs of $8 for direct materials. $5 for direct labor, and $2 for incremental overhead. Kando normally opplies overhead costs using o predetermined rate of 200% of direct labor cost (a) Prepare a make or buy analysis of costs for this part. (b) Should Kando make or buy the port? Direct materials Direct labor Overhead Cost to buy Cost per und Company should Make Buy
Transcribed Image Text:Kando Company currently pays $18 per unit to buy a part for a product it manufactures. Instead, Kendo could make the part for per unit costs of $8 for direct materials. $5 for direct labor, and $2 for incremental overhead. Kando normally opplies overhead costs using o predetermined rate of 200% of direct labor cost (a) Prepare a make or buy analysis of costs for this part. (b) Should Kando make or buy the port? Direct materials Direct labor Overhead Cost to buy Cost per und Company should Make Buy
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