The Bramble Company manufactures 3,800 units of a part that could be purchased from an outside supplier for $14 each. Bramble's costs to manufacture each part are as follows: Direct materials $3 Direct labor 2 Variable manufacturing overhead Fixed manufacturing overhead 9. Total $19 All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses. a-b)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The Bramble Company manufactures 3,800 units of a part that could be purchased from an outside supplier for $14 each. Bramble's
costs to manufacture each part are as follows:
Direct materials
$3
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
9.
Total
$19
All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no
alternative uses.
(a-b)
Gress margin-ISalos Cost/Sales
>>
F1O
F9
FB
F7
F6
F5
吕口
F4
F3
Transcribed Image Text:Show Attempt History Current Attempt in Progress The Bramble Company manufactures 3,800 units of a part that could be purchased from an outside supplier for $14 each. Bramble's costs to manufacture each part are as follows: Direct materials $3 Direct labor Variable manufacturing overhead Fixed manufacturing overhead 9. Total $19 All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses. (a-b) Gress margin-ISalos Cost/Sales >> F1O F9 FB F7 F6 F5 吕口 F4 F3
(c) If Bramble could lease the manufacturing facilities to another company for $23,800 per year, what would be the net total
cost to outsource production of the part?
Net cost to buy $
(d) Should Bramble outsource production of the part given the opportunity to lease the facilities?
Transcribed Image Text:(c) If Bramble could lease the manufacturing facilities to another company for $23,800 per year, what would be the net total cost to outsource production of the part? Net cost to buy $ (d) Should Bramble outsource production of the part given the opportunity to lease the facilities?
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