Wheeler Company can produce a product that incurs the following costs per unit: direct materials, $9.10; direct labor, $23.10, and overhead, $15.10. An outside supplier has offered to sell the product to Wheeler for $42.56. If Wheeler buys from the supplier, it will still incur 40% of its overhead cost. Compute the net incremental cost or savings of buying. Multiple Choice $3.75 savings per unit. $1.30 cost per unit. $1.30 savings per unit. $3.75 cost per unit. $4.32 cost per unit.

Wheeler Company can produce a product that incurs the following costs per unit: direct materials, $9.10; direct labor, $23.10, and overhead, $15.10. An outside supplier has offered to sell the product to Wheeler for $42.56. If Wheeler buys from the supplier, it will still incur 40% of its overhead cost. Compute the net incremental cost or savings of buying. Multiple Choice $3.75 savings per unit. $1.30 cost per unit. $1.30 savings per unit. $3.75 cost per unit. $4.32 cost per unit.

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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Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed cost = $10,000 Material cost per unit = $ 0.15 Labor cost per unit = $ 0.10 Revenue per unit = $ 0.65 These data are given in the file CoxElectric. Note that fixed cost is incurred regardless of the amount produced. Per-unit material and labor cost together make up the variable cost per unit. Assuming Cox Electric sells all that it produces, profit is calculated by subtracting the fixed cost and total variable cost rom total revenue. Create a spreadsheet model and construct a 1-way table and determine the breakeven point (use intervals of 10,000 units). Group of answer choices 20,000 - 30,000 10,000 - 20,000 30,000 - 40,000 25,000 30,000 20,000
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The effect on operating income from making the part would be a
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