Make-or-Buy, Traditional Analysis Wehner Company is currently manufacturing Part ABS-43, producing 56,300 units annually. The part is used production of several products made by Wehner. The cost per unit for ABS-43 is as follows: Direct materials $42.05 Direct labor 9.90 Variable overhead 3.40 Fixed overhead 4.10 Total $59.45 Of the total fixed overhead assigned to ABs-43, $12,217 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside sup has offered to sell the part to Wehner for $55.16. There is no alternative use for the facilities currently used produce the part. No significant non-unit-based overhead costs are incurred.

Make-or-Buy, Traditional Analysis Wehner Company is currently manufacturing Part ABS-43, producing 56,300 units annually. The part is used production of several products made by Wehner. The cost per unit for ABS-43 is as follows: Direct materials $42.05 Direct labor 9.90 Variable overhead 3.40 Fixed overhead 4.10 Total $59.45 Of the total fixed overhead assigned to ABs-43, $12,217 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside sup has offered to sell the part to Wehner for $55.16. There is no alternative use for the facilities currently used produce the part. No significant non-unit-based overhead costs are incurred.

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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