San Pablo Machine Works had always made its components in-house. However, Silangan Company had recently offered to supply one component -Part No. C430-ata price of550 pesos each. San Pablo Machine Works uses 5,300 units of part C-430 each year. The current cost to produce this component is as follows: Unit Cost Total Cost Direct materials 250 1,325,000 Direct labor 119 630,700 Variable overhead 95 503,500 Fixed overhead 150 795,000 Total 614 3,254,200 a Calculate which alternative is better.
San Pablo Machine Works had always made its components in-house. However, Silangan Company had recently offered to supply one component -Part No. C430-ata price of550 pesos each. San Pablo Machine Works uses 5,300 units of part C-430 each year. The current cost to produce this component is as follows: Unit Cost Total Cost Direct materials 250 1,325,000 Direct labor 119 630,700 Variable overhead 95 503,500 Fixed overhead 150 795,000 Total 614 3,254,200 a Calculate which alternative is better.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![MAKE OR BUY
San Pablo Machine Works had always made its components in-house. However, Silangan Company had
recently offered to supply one component - Part No. C-430 -at a price of 550 pesos each. San Pablo Machine
Works uses 5,300 units of part C-430 each year. The current cost to produce this component is as follows:
Unit Cost
Total Cost
Direct materials
250
1,325,000
Direct labor
119
630,700
Variable overhead
95
503,500
Fixed overhead
150
795,000
Total
614
3,254,200
a Calculate which alternative is better.
|](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F57736d36-2d9d-48d7-9730-9613e7b4b011%2Fbafcccad-3962-48be-b35f-5d94443b0be6%2F96xzbnl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:MAKE OR BUY
San Pablo Machine Works had always made its components in-house. However, Silangan Company had
recently offered to supply one component - Part No. C-430 -at a price of 550 pesos each. San Pablo Machine
Works uses 5,300 units of part C-430 each year. The current cost to produce this component is as follows:
Unit Cost
Total Cost
Direct materials
250
1,325,000
Direct labor
119
630,700
Variable overhead
95
503,500
Fixed overhead
150
795,000
Total
614
3,254,200
a Calculate which alternative is better.
|
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education