W.T. Ginsburg Engine Company manufactures part ACT31107 used in several of its engine models. Monthly production costs for 1,050 units are as follows: Direct materials Direct labor Variable overhead costs Fixed overhead costs Total costs $41,000 6,500 33,500 22,000 $103,000 It is estimated that 10% of the fixed overhead costs assigned to ACT31107 will no longer be incurred if the company purchases ACT31107 from the outside supplier. W.T. Ginsburg Engine Company has the option of purchasing the part from an outside supplier at $95.75 per unit. A. $79.24 per ACT31107 part B. $100.19 per ACT31107 part C. $98.00 per ACT31107 part OD. $77.00 per ACT31107 part
W.T. Ginsburg Engine Company manufactures part ACT31107 used in several of its engine models. Monthly production costs for 1,050 units are as follows: Direct materials Direct labor Variable overhead costs Fixed overhead costs Total costs $41,000 6,500 33,500 22,000 $103,000 It is estimated that 10% of the fixed overhead costs assigned to ACT31107 will no longer be incurred if the company purchases ACT31107 from the outside supplier. W.T. Ginsburg Engine Company has the option of purchasing the part from an outside supplier at $95.75 per unit. A. $79.24 per ACT31107 part B. $100.19 per ACT31107 part C. $98.00 per ACT31107 part OD. $77.00 per ACT31107 part
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:W.T. Ginsburg Engine Company manufactures part ACT31107 used in several of its engine models. Monthly production
costs for 1,050 units are as follows:
Direct materials
Direct labor
Variable overhead costs
Fixed overhead costs
Total costs
$41,000
6,500
33,500
22,000
$103,000
It is estimated that 10% of the fixed overhead costs assigned to ACT31107 will no longer be incurred if the company
purchases ACT31107 from the outside supplier. W.T. Ginsburg Engine Company has the option of purchasing the part
from an outside supplier at $95.75
per unit.
A. $79.24 per ACT31107 part
B. $100.19 per ACT31107 part
C. $98.00 per ACT31107 part
D. $77.00 per ACT31107 part
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