RelyaTech Corporation makes an extra large part to use in one its fabulous products. A total of 16,000 units of this extra large part are produced and used every year. The company's costs of producing the extra large part at this level of activity are below: Direct materials Direct labor Variable manufacturing overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Multiple Choice Per Unit $3.50 $8.10 $8.60 (D#75838) An outside supplier has offered to make the extra large part and sell it to RelyaTech for $2710 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the extra large part has no salvage value or other use. The allocated general overhead represents fixed costs of the entire RelyaTech company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make the extra large part could be used to make more of one of the company's other fabulous products, generating an additional segment margin of $28,000 per year for that product a) What would be the annual financial advantage (disadvantage) for RelyaTech Corp, as a result of buying the extra large part from the outside supplier? $18.400) $4.00 $2.40 $7.60

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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RelyaTech Corporation makes an extra large part to use in one its fabulous products. A total of 16,000 units of this extra large part are produced and used
every year. The company's costs of producing the extra large part at this level of activity are below:
Direct materials
Direct labor
Variable manufacturing overhead
Supervisor's salary
Depreciation of special equipment
Allocated general overhead
(ID#75838)
An outside supplier has offered to make the extra large part and sell it to RelyaTech for $2710 each.
If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided.
Per
Unit
$3.50
$8.10
$8.60
$4.00
$2.40
$7.60
The special equipment used to make the extra large part has no salvage value or other use.
The allocated general overhead represents fixed costs of the entire RelyaTech company, none of which would be avoided if the part v
chased instead
of produced internally. In addition, the space used to make the extra large part could be used to make more of one of the company's other fabulous
products, generating an additional segment margin of $28,000 per year for that product
a) What would be the annual financial advantage (disadvantage) for RelyaTech Corp, as a result of buying the extra large part from the outside supplier?
Multiple Choice
$18.400)
Transcribed Image Text:2:14 RelyaTech Corporation makes an extra large part to use in one its fabulous products. A total of 16,000 units of this extra large part are produced and used every year. The company's costs of producing the extra large part at this level of activity are below: Direct materials Direct labor Variable manufacturing overhead Supervisor's salary Depreciation of special equipment Allocated general overhead (ID#75838) An outside supplier has offered to make the extra large part and sell it to RelyaTech for $2710 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. Per Unit $3.50 $8.10 $8.60 $4.00 $2.40 $7.60 The special equipment used to make the extra large part has no salvage value or other use. The allocated general overhead represents fixed costs of the entire RelyaTech company, none of which would be avoided if the part v chased instead of produced internally. In addition, the space used to make the extra large part could be used to make more of one of the company's other fabulous products, generating an additional segment margin of $28,000 per year for that product a) What would be the annual financial advantage (disadvantage) for RelyaTech Corp, as a result of buying the extra large part from the outside supplier? Multiple Choice $18.400)
pant
ge value or other use.
The allocated general overhead represents fixed costs of the entire RelyaTech company, none of which would be avoided if the part were purchased inste
of produced internally. In addition, the space used to make the extra large part could be used to make more of one of the company's other fabulous
products, generating an additional segment margin of $28,000 per year for that product.
Q) What would be the annual financial advantage (disadvantage) for RelyaTech Corp, as a result of buying the extra large part from the outside supplier?
Multiple Choice
$(18,400)
($136,000)
($74,400)
$28.000
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Transcribed Image Text:pant ge value or other use. The allocated general overhead represents fixed costs of the entire RelyaTech company, none of which would be avoided if the part were purchased inste of produced internally. In addition, the space used to make the extra large part could be used to make more of one of the company's other fabulous products, generating an additional segment margin of $28,000 per year for that product. Q) What would be the annual financial advantage (disadvantage) for RelyaTech Corp, as a result of buying the extra large part from the outside supplier? Multiple Choice $(18,400) ($136,000) ($74,400) $28.000 < Prev 51 of 100 Next >
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