Hooray Company has been manufacturing 12,000 units of Part A which is used to manufacture one of its products. At this level of production, the cost per unit is as follows: Direct materials P 4.80 Direct labor 19.20 Variable overhead 9.60 Fixed overhead 14.40 Hooray Company has an opportunity to purchase the parts from Supplier Silver Company at P45.60 per unit. It determined that it could use the facilities presently used to manufacture Part A and generate an operating profit of P9,600. It also determined that 40% of the fixed overhead applied will continue even if Part A is purchased from Supplier Silver If the Company decides to purchase from an outside supplier, what will be the gain or loss? *write gain as positive and loss as negative

Hooray Company has been manufacturing 12,000 units of Part A which is used to manufacture one of its products. At this level of production, the cost per unit is as follows: Direct materials P 4.80 Direct labor 19.20 Variable overhead 9.60 Fixed overhead 14.40 Hooray Company has an opportunity to purchase the parts from Supplier Silver Company at P45.60 per unit. It determined that it could use the facilities presently used to manufacture Part A and generate an operating profit of P9,600. It also determined that 40% of the fixed overhead applied will continue even if Part A is purchased from Supplier Silver If the Company decides to purchase from an outside supplier, what will be the gain or loss? *write gain as positive and loss as negative

Name: Hooray Company has been manufacturing 12,000 units of Part A which is
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Description: Hooray Company has been manufacturing 12,000 units of Part A which is used tomanufacture one of its products. At this level of production, the cost per unit is as follows:20.Direct materialsP 4.80Direct labor19.20Variable overhead9.60Fixed overhead1

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 6PB: Box Springs. Inc., makes two sizes of box springs: queen and king. The direct material for the queen...

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