Quirch Inc. manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 4,200 units of product PQ107 for Valters for a price of $150,000. If Quirch does not purchase these parts from the subcontractor it must produce them in-house with the following unit costs: Cost per Unit Direct materials $54 Direct labor 34 Variable overhead 17 In addition to the above costs, if Quirch produces part PQ107, it would have a retooling and design cost of $17,100. The relevant costs of producing 4,200 units of product PQ107 internally are:
Quirch Inc. manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 4,200 units of product PQ107 for Valters for a price of $150,000. If Quirch does not purchase these parts from the subcontractor it must produce them in-house with the following unit costs: Cost per Unit Direct materials $54 Direct labor 34 Variable overhead 17 In addition to the above costs, if Quirch produces part PQ107, it would have a retooling and design cost of $17,100. The relevant costs of producing 4,200 units of product PQ107 internally are:
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 3CMA: Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each...
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Quirch Inc. manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 4,200 units of product PQ107 for Valters for a price of $150,000. If Quirch does not purchase these parts from the subcontractor it must produce them in-house with the following unit costs:
| Cost per Unit | |
| Direct materials | $54 |
| Direct labor | 34 |
| Variable |
17 |
In addition to the above costs, if Quirch produces part PQ107, it would have a retooling and design cost of $17,100. The relevant costs of producing 4,200 units of product PQ107 internally are:
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