Part U67 is used in one of Broce Corporation's products. The company's Accounting Department reports the following costs of producing the 16,600 units of the part that are needed every year. Per Unit $ 3.80 $ 4.50 $ 7.50 $ 8.20 $ 8.80 $ 5.80 Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead An outside supplier has offered to make the part and sell it to the company for $31.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $22,600 of these allocated general overhead costs would be avoided. Required: a. Prepare a report that shows the financial impact of buying part U67 from the supplier rather than continuing to make it inside the

Part U67 is used in one of Broce Corporation's products. The company's Accounting Department reports the following costs of producing the 16,600 units of the part that are needed every year. Per Unit $ 3.80 $ 4.50 $ 7.50 $ 8.20 $ 8.80 $ 5.80 Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead An outside supplier has offered to make the part and sell it to the company for $31.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $22,600 of these allocated general overhead costs would be avoided. Required: a. Prepare a report that shows the financial impact of buying part U67 from the supplier rather than continuing to make it inside the

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Description: Complete this question by entering your answers in the tabs below.Required ARequired BWhich alternative should the company choose?The total cost of the "make" alternative isbyTherefore, the company shouldthe part. Part U67 is

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 4SEQ: For which cost concept used in applying (he cost-plus, approach to product pricing are fixed...

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