Knox Company uses 10,000 units of a part in its production process. The costs to make a part are: direct material, P12; direct labor, P25; variable overhead, P13; and applied fixed overhead, P30. Knox has received a quote of P55 from a potential supplier for this part. If Knox buys the part, 70 percent of the applied fixed overhead would continue. 13) Knox Company would be better off by a. P50,000 to manufacture the part. b. P150,000 to buy the part. C. P40,000 to buy the part. d. P160,000 to manufacture the part.

Knox Company uses 10,000 units of a part in its production process. The costs to make a part are: direct material, P12; direct labor, P25; variable overhead, P13; and applied fixed overhead, P30. Knox has received a quote of P55 from a potential supplier for this part. If Knox buys the part, 70 percent of the applied fixed overhead would continue. 13) Knox Company would be better off by a. P50,000 to manufacture the part. b. P150,000 to buy the part. C. P40,000 to buy the part. d. P160,000 to manufacture the part.

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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