Alpha Co. can produce a unit of Beta for the following costs: 40 Total costs per

Question

Alpha Co. can produce a unit of Beta for the following costs: 40 Total costs per uit An outside supplier offers to provide Alpha with all the Beta units it needs at $60 per unit. if Alpha buys from the supplier, Alpha will still incur 40% of its overhead. Alpha should: D Buy Beta since the relevant cost to make it is $72. O Make Beta since the relevant cost to make it is $56 D Buy Beta since the relevant cost to make it is $48. D Make Beta since the relevant cost to make it is $48. D Buy Beta since the relevant cost to make it is s56 QUESTION 9 Green Company produces 1,000 parts per year. which are used in the assembly of one of its products. The unit product cost of these parts is: 2 $12 l'ixed manufacturing cost.... Unit product cost The part can be purchased from an outside supplier at $20 perunit. if the part is prchased from the outside supplier two thirds of the fixed manufacturing costs can income as a result of buying the part from the outside supplier would be on the company's net operating $1,000 increase

Explanation / Answer

Question 1:

So the option is Make Beta since the relevant cost to make is $56.

Question 9:

Note: As the detailed options are not given I am making the solutions from the question provided only.

If the Green Company produces the product the cost is 21 and if it buys from the outside supplier it costs 20, hence the savings will be 1$ per unit, and on 1000 units it will be 1000$ savings

along with this there is also saving of the 2/3rd of the fixed costs are also to be saved which means =9(Fixed cost per unit)*1000(units)=9000 $ savings

2/3 of 9000= 6000, hence the total savings will be =9000+1000=10000$ total savings.

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