A company manufactures machines and has always produced all of the necessary parts for the machines as well (including batte An outside supplier has offered to sell one type of battery to the company for a cost of $37 per unit. For the company's own production of this battery, they compiled the following information: 23,000 Units Unit Per Year $ 16 $ 368,000 Per Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, battery Fixed manufacturing overhead, allocated 207,000 92,000 138,000 207,000 $ 44 $1,012,000 4 6* 9. Total cost "One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). If the batteries were purchased, the allocated fixed manufacturing cost would not be eliminated. If the company no longer produe the battery, it would be able to use the freed capacity to launch a new product. The segment margin of the new product would be $230,000 per year. What would be the financial advantage or disadvantage of buying 23,000 batteries from the outside supplier? disadvantage, place the number in parentheses (e.g., (50000)).
A company manufactures machines and has always produced all of the necessary parts for the machines as well (including batte An outside supplier has offered to sell one type of battery to the company for a cost of $37 per unit. For the company's own production of this battery, they compiled the following information: 23,000 Units Unit Per Year $ 16 $ 368,000 Per Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, battery Fixed manufacturing overhead, allocated 207,000 92,000 138,000 207,000 $ 44 $1,012,000 4 6* 9. Total cost "One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). If the batteries were purchased, the allocated fixed manufacturing cost would not be eliminated. If the company no longer produe the battery, it would be able to use the freed capacity to launch a new product. The segment margin of the new product would be $230,000 per year. What would be the financial advantage or disadvantage of buying 23,000 batteries from the outside supplier? disadvantage, place the number in parentheses (e.g., (50000)).
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...
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