Randle aviation manufactures high-end airliners for top-tier celebrities. During the previous year, Randle produced a total of 100 airliners. Each of these airliners requires a complicated computer system that Randle is considering outsourcing. Currently, for the 100 computer units produced during the year, a total of $7,500,000 were incurred for product costs, of which $4,000,000 were fixed. The remaining product costs were variable. If the computer is outsourced, fixed manufacturing overhead will decrease by 4%, and the freed-up space in the warehouse can be used to produce another part that is high demand. By producing the part in high demand, Randle will produce $500,000 in additional operating income. Assuming Randle will need 120 computer units next year, at what purchase price per unit will the company be economically indifferent between making the part and outsourcing the part? $40,500.00 $41,500.00 $36.363.64 $39,545.45 © None of the above options are correct.

Randle aviation manufactures high-end airliners for top-tier celebrities. During the previous year, Randle produced a total of 100 airliners. Each of these airliners requires a complicated computer system that Randle is considering outsourcing. Currently, for the 100 computer units produced during the year, a total of $7,500,000 were incurred for product costs, of which $4,000,000 were fixed. The remaining product costs were variable. If the computer is outsourced, fixed manufacturing overhead will decrease by 4%, and the freed-up space in the warehouse can be used to produce another part that is high demand. By producing the part in high demand, Randle will produce $500,000 in additional operating income. Assuming Randle will need 120 computer units next year, at what purchase price per unit will the company be economically indifferent between making the part and outsourcing the part? $40,500.00 $41,500.00 $36.363.64 $39,545.45 © None of the above options are correct.

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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