San Pablo Machine Works had always made its components in-house. However, Silangan Company had recently offered to supply one component -Part No. C430-ata price of550 pesos each. San Pablo Machine Works uses 5,300 units of part C-430 each year. The current cost to produce this component is as follows: Unit Cost Total Cost Direct materials 250 1,325,000 Direct labor 119 630,700 Variable overhead 95 503,500 Fixed overhead 150 795,000 Total 614 3,254,200 a Calculate which alternative is better.

San Pablo Machine Works had always made its components in-house. However, Silangan Company had recently offered to supply one component -Part No. C430-ata price of550 pesos each. San Pablo Machine Works uses 5,300 units of part C-430 each year. The current cost to produce this component is as follows: Unit Cost Total Cost Direct materials 250 1,325,000 Direct labor 119 630,700 Variable overhead 95 503,500 Fixed overhead 150 795,000 Total 614 3,254,200 a Calculate which alternative is better.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 11EA: Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge...

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