Problem: Module 6 Textbook Problem 6 Learning Objective: 6-3 Make appropriate outsourcing decisions Perez Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9.200 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs Allocated facility-level costs $ 5,400 6,800 4,100 9,600 27,900 "One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Perez for $2.80 each. Required a. Calculate the total relevant cost. Should Perez continue to make the containers? b. Perez could lease the space it currently uses in the manufacturing process. If leasing would produce $11,700 per month, calculate the total avoidable costs. Should Perez continue to make the containers? Total relevant cost Should Perez continue to make the containers? b. Total avoidable cost Should Perez continue to make the containers?

Problem: Module 6 Textbook Problem 6 Learning Objective: 6-3 Make appropriate outsourcing decisions Perez Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9.200 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs Allocated facility-level costs $ 5,400 6,800 4,100 9,600 27,900 "One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Perez for $2.80 each. Required a. Calculate the total relevant cost. Should Perez continue to make the containers? b. Perez could lease the space it currently uses in the manufacturing process. If leasing would produce $11,700 per month, calculate the total avoidable costs. Should Perez continue to make the containers? Total relevant cost Should Perez continue to make the containers? b. Total avoidable cost Should Perez continue to make the containers?

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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