Wings Incorporated manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 2,300 units of product PQ107 for Valters for a price of $150.000. If Wings does not purchase these parts from the subcontractor it must produce them in-house with the following unit costs: Cost per Unit Direct materials $30 Direct labor 19 9 Variable overhead In addition to the above costs, if Wings produces part PQ107, it would have a retooling and design cost of $9,400. The relevant costs of producing 2,300 units of product PQ107 internally are:
Wings Incorporated manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 2,300 units of product PQ107 for Valters for a price of $150.000. If Wings does not purchase these parts from the subcontractor it must produce them in-house with the following unit costs: Cost per Unit Direct materials $30 Direct labor 19 9 Variable overhead In addition to the above costs, if Wings produces part PQ107, it would have a retooling and design cost of $9,400. The relevant costs of producing 2,300 units of product PQ107 internally are:
Chapter10: Short-term Decision Making
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Wings Incorporated manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 2,300 units of product PQ107 for Valters
Transcribed Image Text:TB MC Qu. 11-21 (Algo) Wings Incorporated manufactures machine parts for ...
Wings Incorporated manufactures machine parts for aircraft engines. The CEO, Chucky Valters, was considering an offer from a subcontractor that would provide 2,300 units of product PQ107 for Valters for a price of
$150,000. If Wings does not purchase these parts from the subcontractor it must produce them in-house with the following unit costs:
Cost per Unit
$30
19
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Direct materials
Direct labor
Variable overhead
In addition to the above costs, if Wings produces part PQ107, it would have a retooling and design cost of $9,400. The relevant costs of producing 2,300 units of product PQ107 internally are:
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