Xia Co. currently buys a component part for $9 per unit. Xia believes that making the part would require $6.40 pe unit of direct materials and $1.05 per unit of direct labor. Xia allocates overhead using a predetermined overhead rate of 205% of direct labor cost. Xia estimates an incremental overhead rate of $0.55 per unit to make the part. 1-a. What are the relevant costs for Xia to make or buy the part? (Round your answers to 2 decimal places.) Make Buy Per Unit 1-b. Should Xia make or buy the part? O Make O Buy

Xia Co. currently buys a component part for $9 per unit. Xia believes that making the part would require $6.40 pe unit of direct materials and $1.05 per unit of direct labor. Xia allocates overhead using a predetermined overhead rate of 205% of direct labor cost. Xia estimates an incremental overhead rate of $0.55 per unit to make the part. 1-a. What are the relevant costs for Xia to make or buy the part? (Round your answers to 2 decimal places.) Make Buy Per Unit 1-b. Should Xia make or buy the part? O Make O Buy

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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