Metlock Manufacturing incurs unit costs of $8.50 ($5.50 variable and $3.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 18,600 of the parts for $6.10 per unit. If it accepts the offer, Metlock will save all variable costs ar $1.00 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Metlock will realize by buying the part. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).) 146644651
Metlock Manufacturing incurs unit costs of $8.50 ($5.50 variable and $3.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 18,600 of the parts for $6.10 per unit. If it accepts the offer, Metlock will save all variable costs ar $1.00 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Metlock will realize by buying the part. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, e.g.-15,000 or parenthesis, e.g. (15,000).) 146644651
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter13: The Balanced Scorecard: Strategic-based Control
Section: Chapter Questions
Problem 8E: Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its...
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