Answered: Unit Costs: DM P20 DL 28 Other Variable…

Business

Accounting

Unit Costs: DM P20 DL 28 Other Variable Expenses Allocated Facility-level Costs 2 10 P60 Total Unit Cost

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2DQ: Which of the following costs would be classified as variable and which would be classified as fixed,...

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Question

100%

Each year, the company needs atleast 10,000 parts. A supplier has offered to sell a component to the company for ₱54 each. However, if the company choose to outsource the component of the product, it can use the facilities to make another product that would yield a total contribution margin of ₱60,000 per year. The unit cost for making the components is shown below

A. How much is the total cost to make the component?

B. How much is the total cost to buy the component?

C. How much is opportunity cost in the given problem?

D. What should be the optimal decision for the company?

Unit Costs:
DM
P20
DL
28
Other Variable Expenses
Allocated Facility-level Costs
10
Total Unit Cost
P60

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