repare a mURU Gelb Co. currently makes a key part for its main product. M $1.20 for direct materials and $0.75 for direct labor. Increme The company can buy the part for $3.50 per unit. (a) Prep (b) Should Gelb make or buy the part?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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(a) Prepare a make of buy uhury
Gelb Co. currently makes a key part for its main product. Making this part incurs per unit variable costs of
$1.20 for direct materials and $0.75 for direct labor. Incremental overhead to make this part is $1.40 per unit.
The company can buy the part for $3.50 per unit, (a) Prepare a make or buy analysis of costs for this
(b) Should Gelb make or buy the part?
part.
Exercise 23-2
Make or buy
P1
Transcribed Image Text:(a) Prepare a make of buy uhury Gelb Co. currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.20 for direct materials and $0.75 for direct labor. Incremental overhead to make this part is $1.40 per unit. The company can buy the part for $3.50 per unit, (a) Prepare a make or buy analysis of costs for this (b) Should Gelb make or buy the part? part. Exercise 23-2 Make or buy P1
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