The SP Corporation makes 35,000 motors to be used in the production of its sewing machines. The average cost per motor at this level of activity is: Direct materials $9.40 $8.40 $3.40 $4.35 Direct labor Variable manufacturing overhead Fixed manufacturing overhead An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $23.65. If SP Corporation decides not to m motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial adv (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be: Multiple Choice (S66,500) $204,750

The SP Corporation makes 35,000 motors to be used in the production of its sewing machines. The average cost per motor at this level of activity is: Direct materials $9.40 $8.40 $3.40 $4.35 Direct labor Variable manufacturing overhead Fixed manufacturing overhead An outside supplier recently began producing a comparable motor that could be used in the sewing machine. The price offered to SP Corporation for this motor is $23.65. If SP Corporation decides not to m motors, there would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. Direct labor is a variable cost in this company. The annual financial adv (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be: Multiple Choice (S66,500) $204,750

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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