Rubium Micro Devices currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct materials $54.00 35.00 Direct labor Variable overhead 40.00 Fixed overhead 34.00 $163.00 Total costs Crayola Technologies Inc. has contacted Rubium with an offer to sell 6,000 of the subassemblies for $144.00 each. Rubium will eliminate $89,000 of fixed overhead if it accepts the proposal. Should Rubium make or buy the subassemblies? What is the difference between the two alternatives? Make; savings = $1,000 %3D Buy; savings = $7,000 %3D Make; savings = $203,000 %3D Buy; savings $89,000 %3D

Rubium Micro Devices currently manufactures a subassembly for its main product. The costs per unit are as follows: Direct materials $54.00 35.00 Direct labor Variable overhead 40.00 Fixed overhead 34.00 $163.00 Total costs Crayola Technologies Inc. has contacted Rubium with an offer to sell 6,000 of the subassemblies for $144.00 each. Rubium will eliminate $89,000 of fixed overhead if it accepts the proposal. Should Rubium make or buy the subassemblies? What is the difference between the two alternatives? Make; savings = $1,000 %3D Buy; savings = $7,000 %3D Make; savings = $203,000 %3D Buy; savings $89,000 %3D

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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