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Makeoruy Decsion. Atenatives. Relevart Costa Each year Gada Company produces 25.000 unita of a compenent part used in tablet computers. An outaide suppler has offered to oply the part for s4.00. The unit cot ia Direct maeras Direct laber 125 Varable overhead 0.75 Fed ovehead Toral unit ct Required 1. what are the atematives for Gada Company Hake the part in house or bur the part externally 2. Asnume that nane of the fed cot is veidable Un the relevant eota) of intemal production. Direct materials, dicect labor and variable.echead LR the relevant cot) of etemal purchase Earshasnerice 3. which atemative is more cot effective and by hew much? Hakina the artin hon 4. Whar if 125.000 of fued overhead is rental of evoment used enly in preduction of the component that can be aveided the component a purchased which atenative more cot efective and by haw much? ering the part frem the external supplier by 14.25 X v by 16.248.7 x

Makeoruy Decsion. Atenatives. Relevart Costa Each year Gada Company produces 25.000 unita of a compenent part used in tablet computers. An outaide suppler has offered to oply the part for s4.00. The unit cot ia Direct maeras Direct laber 125 Varable overhead 0.75 Fed ovehead Toral unit ct Required 1. what are the atematives for Gada Company Hake the part in house or bur the part externally 2. Asnume that nane of the fed cot is veidable Un the relevant eota) of intemal production. Direct materials, dicect labor and variable.echead LR the relevant cot) of etemal purchase Earshasnerice 3. which atemative is more cot effective and by hew much? Hakina the artin hon 4. Whar if 125.000 of fued overhead is rental of evoment used enly in preduction of the component that can be aveided the component a purchased which atenative more cot efective and by haw much? ering the part frem the external supplier by 14.25 X v by 16.248.7 x

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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CengageNOWv2| Online teachin × A v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false Week 6 Homework eBook E Print Item 1. BEX. 17.01 Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Giada Company produces 25,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $4.00. The unit cost is: 2. BEX.17.01.ALGO Direct materials $1.60 3. BEX.17.03 Direct labor 1.25 Variable overhead 0.75 4. BEX.17.03.ALGO Fixed overhead 2.50 5. EX.17.13 Total unit cost $6.10 Required: 6. EX.17.13.ALGO 1. What are the alternatives for Giada Company? 7. EX.17.15 Make the part in house or buy the part externally 8. EX.17.15.ALGO 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. Direct materials, direct labor and variable overhead List the relevant cost(s) of external purchase. Purchase price 3. Which alternative is more cost effective and by how much? Making the part in house V by $ 146,251 x 4. What if $25,000 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? Buying the part from the external supplier v by $ 16,248.7 Feedback Check My Wark 1. Review what you have learned in the chapter. 2. Relevant costs are future costs that differ across alternatives. For each cost given, ask yourself if the company would incur different amounts of the costs, in total, for each alternative. 3. Set up the analysis with the relevant costs organized under a column heading for each alternative. What is the difference between the two alternatives? 4. Will this cost differ between the alternatives? If so, redo the analysis to account for this cost. What is the difference between the two alternatives? See Example 17.1. Check My Work Next Progress: 1/8 items Assignment Score: 17.26% All work saved. Submit Assignment for Grading Save and Exit 9:51 PM e Type here to search DELL 35°F 12/4/2021 ...
Transcribed Image Text:CengageNOWv2| Online teachin × A v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false Week 6 Homework eBook E Print Item 1. BEX. 17.01 Make-or-Buy Decision, Alternatives, Relevant Costs Each year, Giada Company produces 25,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $4.00. The unit cost is: 2. BEX.17.01.ALGO Direct materials $1.60 3. BEX.17.03 Direct labor 1.25 Variable overhead 0.75 4. BEX.17.03.ALGO Fixed overhead 2.50 5. EX.17.13 Total unit cost $6.10 Required: 6. EX.17.13.ALGO 1. What are the alternatives for Giada Company? 7. EX.17.15 Make the part in house or buy the part externally 8. EX.17.15.ALGO 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. Direct materials, direct labor and variable overhead List the relevant cost(s) of external purchase. Purchase price 3. Which alternative is more cost effective and by how much? Making the part in house V by $ 146,251 x 4. What if $25,000 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? Buying the part from the external supplier v by $ 16,248.7 Feedback Check My Wark 1. Review what you have learned in the chapter. 2. Relevant costs are future costs that differ across alternatives. For each cost given, ask yourself if the company would incur different amounts of the costs, in total, for each alternative. 3. Set up the analysis with the relevant costs organized under a column heading for each alternative. What is the difference between the two alternatives? 4. Will this cost differ between the alternatives? If so, redo the analysis to account for this cost. What is the difference between the two alternatives? See Example 17.1. Check My Work Next Progress: 1/8 items Assignment Score: 17.26% All work saved. Submit Assignment for Grading Save and Exit 9:51 PM e Type here to search DELL 35°F 12/4/2021 ...
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