Nuru Co. manufactures special car sensors, among other car parts. The per unit cost to manufacture 20,000 car sensors is as follows: Direct materials Direct labour Variable overhead Fixed overhead - traceable Allocated fixed overhead Total $50 $40 $6 $10 $20 $126 Nuru is approached by Gisa Co. which offers to make Sensors for $115 per unit. The allocated fixed overhead consists of common costs which are allocated to segments on the basis of sales dollars. Required Part A 1. What is the financial advantage/disadvantage of accepting Gisa's offer?

Nuru Co. manufactures special car sensors, among other car parts. The per unit cost to manufacture 20,000 car sensors is as follows: Direct materials Direct labour Variable overhead Fixed overhead - traceable Allocated fixed overhead Total $50 $40 $6 $10 $20 $126 Nuru is approached by Gisa Co. which offers to make Sensors for $115 per unit. The allocated fixed overhead consists of common costs which are allocated to segments on the basis of sales dollars. Required Part A 1. What is the financial advantage/disadvantage of accepting Gisa's offer?

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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