Xia Co. currently buys a component part for $9 per unit. Xia believes that making the part would require $4.45 per unit of direct materials and $1.05 per unit of direct labor. Xia allocates overhead using a predetermined overhead rate of 220% of direct labor cost Xia estimates an incremental overhead rate of $0.50 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 $4.45 per unit of direct materials and $1.05 per unit of direct labor. Xia allocates overhead using a predetermined overhead rate of 220% of direct labor cost Xia estimates an incremental overhead rate of $0.50 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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Crane Manufacturing Company Inc. uses 640 units of Part # 4317 each year in the manufacture of one of its products. The company currently produces the part internally, but an outside supplier has offered to provide the part at a price of $100 per part. If Crane chooses to purchase the part from the outside supplier, one third of it's the fixed manufacturing overhead will be eliminated. The company's standard unit cost of producing the part is listed below. Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost $32 30 29 33 Crane $124 Ignoring qualitative factors, should Crane continue to make the parts internally or purchase them from the outside supplier? ✓ continue to make the part.
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Current Attempt in Progress Kiner Co. computed an overhead rate for mnachining costs ($680000) of $5 per machine hour. Machining costs are driven by machine hours. If computed based on direct labor hours, the overhead rate for machining costs would be $10 per direct labor hour. The company produces two products, Cape and Chap. Cape requires 81600 machine hours and 20000 direct labor hours, while Chap requires 54400 machine hours and 30000 direct labor hours. Using activity-based costing, machining costs assigned to each product is Chap Саре $408000 $272000 $750000 $250000 $200000 $300000 $371441 $308559
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