A company makes 36,000 motors to be used in the production of its blender. The average cost per motor at this level of activity is: Direct materials $ 9.50 Direct labor $ 8.50 Variable manufacturing overhead $ 3.45 $4.40 Fixed manufacturing overhead An outside supplier recently began producing a comparable motor that could be used in the blender. The price offered to the company for this motor is $23.95. There would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be: Multiple Choice ($68,400) $214,200 90,000 $158,400
A company makes 36,000 motors to be used in the production of its blender. The average cost per motor at this level of activity is: Direct materials $ 9.50 Direct labor $ 8.50 Variable manufacturing overhead $ 3.45 $4.40 Fixed manufacturing overhead An outside supplier recently began producing a comparable motor that could be used in the blender. The price offered to the company for this motor is $23.95. There would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided. The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would be: Multiple Choice ($68,400) $214,200 90,000 $158,400
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...
Related questions
Question
![A company makes 36,000 motors to be used in the production of its blender.
The average cost per motor at this level of activity is:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
An outside supplier recently began producing a comparable motor that could be used in the blender.
The price offered to the company for this motor is $23.95.
There would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided.
The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would
be:
Multiple Choice
O
O
O
($68,400)
$214,200
$9.50
$ 8.50
$ 3.45
$ 4.40
90,000
$158,400](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3af1e7b2-a62a-4192-a979-54731211f84c%2Fcfe36c8e-321f-4674-ac8d-fa09eac496de%2F8cjkbkq_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A company makes 36,000 motors to be used in the production of its blender.
The average cost per motor at this level of activity is:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
An outside supplier recently began producing a comparable motor that could be used in the blender.
The price offered to the company for this motor is $23.95.
There would be no other use for the production facilities and none of the fixed manufacturing overhead cost could be avoided.
The annual financial advantage (disadvantage) for the company as a result of making the motors rather than buying them from the outside supplier would
be:
Multiple Choice
O
O
O
($68,400)
$214,200
$9.50
$ 8.50
$ 3.45
$ 4.40
90,000
$158,400
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub