Y. xy D Chap 12 Excel Simulator X O ezto.mheducation.com/hm.tpx?-0.7675506321070

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Y. xy D Chap 12 Excel Simulator X O ezto.mheducation.com/hm.tpx?-0.7675506321070334 1523591502148 1 Alanco, Inc. manufactures a variety of products and is currently maunfacturing all of its own component parts. 2 An outside supplier has offered to sell one of those components to Alanco. To evaluate this offer the following 3 information has been gathered relating to the cost of producing the component internally: S Direct materials 6 Direct labor 7 Variable manufacturing overhead 8 Fixed manufacturing overhead, traceable 9 Fixed manufacturing overhead, common but allocated 10 Total cost 4.00 6.00 2.00 5.00 8.00 12 Supplier price $21.00 14 Units used per year 12,000 erhead, traceable is composed of two items: 7Depreciation of equipment (no resale value) 18Supervisor salary 809% 70% 20 1 a. Assuming the company has no alternative use for the facilites now being used to produce the 21 component, complete the following analysis to determine if the outside supplier's offer should be accepted. to determine f the outside supplier's offer should be accepted 23

Explanation / Answer

Per unit Total 12000 units Make Buy Make Buy Cost of purchasing 21 252000 Direct materials 4 48000 Direct labor 6 72000 Variable manufacturing overhead 2 24000 Fixed manufacturing overhead traceable 3.5 42000 Fixed manufacturing overhead common Total 15.5 21 186000 252000 Alanco should Make the component

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