What is the maximum amount per unit

Assignment Help Accounting Basics
Reference no: EM131752388

Make-or-Buy, Traditional Analysis

Wehner Company is currently manufacturing Part ABS-43, producing 52,200 units annually. The part is used in the production of several products made by Wehner. The cost per unit for ABS-43 is as follows:

Direct materials $42.05
Direct labor 10.00
Variable overhead 2.60
Fixed overhead 3.85
Total $58.50

Of the total fixed overhead assigned to ABS-43, $15,660 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Wehner for $54.46. There is no alternative use for the facilities currently used to produce the part. No significant non-unit-based overhead costs are incurred.

Required:

1. Should Wehner Company make or buy Part ABS-43?
Wehner should the part. This will produce total cost savings of $ .

2. What is the maximum amount per unit that Wehner would be willing to pay to an outside supplier? Round your answer to the nearest cent.

Reference no: EM131752388

Questions Cloud

Which thinker provides best account of fraught relationship : Alfarabi, Maimonides and Augustine each discuss. Which thinker provides the best account of this often fraught relationship? Why?
Develop inventory ordering policy : Dunstreet's Department Store would like to develop an inventory ordering policy of a 99 percent probability of not stocking out.
Compute the effect of this error on net income : Compute the effect of this error on net income for 2017 and the effect on net income for 2018, and indicate the direction of the misstatement for each year
Trade and infrastructural development of the netherlands : Trade and infrastructural development of the Netherlands? Trade and technological progress of the Netherlands?
What is the maximum amount per unit : What is the maximum amount per unit that Wehner would be willing to pay to an outside supplier?
Describe the contribution margin approach : AJ Manufacturing Compan incurred $ 50,000 of fixed product cost and $40,000 of variable product ost during its first year of operation.
Using social media for advertising and brand building : What are the advantages and disadvantages of using social media for advertising, brand building, market research, and customer service?
What would be the monopolist profits : What would be the equilibrium prices and quantities now? What would be the monopolist's profits?
Compare hobbes and rousseau as social contract theorists : Compare and contrast Hobbes, Locke, and Rousseau as social contract theorists. How would you match them up - Hobbes and Locke vs. Rousseau?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd