Q 4. T&T produces product 'X' as a part of its main product. Each year, the company produces75,000 units of product 'X'. The costs of production are mentioned below. An outside supplierhas offered to deliver 75,000 units of product 'X' annually at a cost of $7.35 per unit. A fixedproduction cost of $ 120,000 is unavoidable for product X'. Should T&T Co. make or buyproduct X'?The production costs per unit for manufacturing a unit of product B are:Production CostAmount ($)Direct Materials2.55Direct Labor1.95Variable Manufacturing Overhead1.20Answers:

Solution Concept While taking a make or Buy decision , the total cost of making a product and buying…

Q4. T&T produces product 'X' as a part of its main product. Each year, the company produces 75,000 units of product 'X'. The costs of production are mentioned below. An outside supplier has offered to deliver 75,000 units of product 'X' annually at a cost of $7.35 per unit. A fixed production cost of S 120,000 is unavoidable for product X'. Should T&T Co. make or buy product X?

Q4. T&T produces product 'X' as a part of its main product. Each year, the company produces 75,000 units of product 'X'. The costs of production are mentioned below. An outside supplier has offered to deliver 75,000 units of product 'X' annually at a cost of $7.35 per unit. A fixed production cost of S 120,000 is unavoidable for product X'. Should T&T Co. make or buy product X?

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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