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Glberto Company currently manufactures 78,000 units per year of one of its crucial parts. Varlable costs are $2.60 per unit, fixed costs related to making this part are $88,000 per year, and allocated fixed costs are $75,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Glberto Is consldering buying the part from a supplier for a quoted price of $3.80 per unit guaranteed for a three-year perlod. Calculate the total Incremental cost of making 78,000 and buylng 78,000 units. Should the company continue to manufacture the part, or should It buy the part from the outside suppller? Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Outside Supplier Calculate the total incremental cost of making 78,000 units. (Round cost per unit answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Relevant Fixed Costs Total Relevant Unit Costs Variable cost per unit Fixed manufacturing costs Total incremental cost to make < Costs to Make Costs to Buy >

Glberto Company currently manufactures 78,000 units per year of one of its crucial parts. Varlable costs are $2.60 per unit, fixed costs related to making this part are $88,000 per year, and allocated fixed costs are $75,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Glberto Is consldering buying the part from a supplier for a quoted price of $3.80 per unit guaranteed for a three-year perlod. Calculate the total Incremental cost of making 78,000 and buylng 78,000 units. Should the company continue to manufacture the part, or should It buy the part from the outside suppller? Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Outside Supplier Calculate the total incremental cost of making 78,000 units. (Round cost per unit answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Relevant Fixed Costs Total Relevant Unit Costs Variable cost per unit Fixed manufacturing costs Total incremental cost to make < Costs to Make Costs to Buy >

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 13P: Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income...
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Calculate the total incremental cost of making 78,000 and buying 78,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier?
 

Gilberto Company currently manufactures 78,000 units per year of one of its crucial parts. Variable costs are $2.60 per unit, fixed costs related to making this part are $88,000 per year, and allocated fixed costs are $75,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Glberto is considering buying the part from a supplier for a quoted price of $3.80 per unit guaranteed for a three-year perlod. Calculate the total Incremental cost of making 78,000 and buying 78,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 78,000 units. (Round cost per unit answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Relevant Fixed Costs Total Relevant Unit Costs Variable cost per unit Fixed manufacturing costs Total incremental cost to make < Costs to Make Costs to Buy >
Transcribed Image Text:Gilberto Company currently manufactures 78,000 units per year of one of its crucial parts. Variable costs are $2.60 per unit, fixed costs related to making this part are $88,000 per year, and allocated fixed costs are $75,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Glberto is considering buying the part from a supplier for a quoted price of $3.80 per unit guaranteed for a three-year perlod. Calculate the total Incremental cost of making 78,000 and buying 78,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 78,000 units. (Round cost per unit answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Relevant Fixed Costs Total Relevant Unit Costs Variable cost per unit Fixed manufacturing costs Total incremental cost to make < Costs to Make Costs to Buy >
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