The Park Avenue Corporation currently makes a part required in its finished product. The company uses 2,170 units of this part annually. Park Avenue Corp has been approached by a vendor to provide this part for $13.08 each. The following cost information is providedDirect Materials per unit$5.26Direct Labor per unit$7.30Variable Factory Overhead per unit$2.50Fixed Factory Overhead per unit$7.50How much would Park Avenue Corporation save by having the vendor make the part, instead of making it themselves?Enter your answer rounded to the nearest whole number. Don't enter dollar signs or commas.

Total savings = Total cost of manufacture - Total cost of purchase

Answered: The Park Avenue Corporation currently…

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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The Park Avenue Corporation currently makes a part required in its finished product. The company uses 2,170 units of this part annually. Park Avenue Corp has been approached by a vendor to provide this part for $13.08 each. The following cost information is provided

Direct Materials per unit	$5.26
Direct Labor per unit	$7.30
Variable Factory Overhead per unit	$2.50
Fixed Factory Overhead per unit	$7.50

How much would Park Avenue Corporation save by having the vendor make the part, instead of making it themselves?

Enter your answer rounded to the nearest whole number. Don't enter dollar signs or commas.

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