Solution-What costs are relevant for preparing financial

What costs are relevant for preparing financial statements

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Reference no: EM131769276

Problem - Department 7 of the Arbia Company manufactures a variety of components for products, one of which is Part No. 211. Data on this part are as follows:

	Monthly Planned Cost	Actual Cost July
	Per Unit	Per Unit	Total
Directmaterial and direct labor	$30.17	$29.83	$29,820
Fixed costs, Department 7	6.49	6.88	6,880
Costs allocated to Department 7	13.83	24.29	14,290
	$50.49	$61.00	$50,990

Part No. 211 can be purchased from an outside vendor for 31.00.

Required: What costs are relevant for each of the following purposes?

a) For preparing financial statements for July?

b) For deciding whether to make or buy Part No. 211?

c) For assessing the performance of the manager of Department 7?

Reference no: EM131769276

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What costs are relevant for preparing financial statements

Reference no: EM131769276

Reference no: EM131769276

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