The Fine Point Company currently produces all of the components for its one prod

Question

The Fine Point Company currently produces all of the components for its one product, an electric pencil sharpener. The unit cost of manufacturing the motor for this pencil sharpener is: Direct materials Direct labor Variable overhead Fixed overhead $1.75 $1.65 $0.75 $0.60 2.85 points The company is considering the possibility of buying this motor from a subcontractor and has been quoted a price of $3.60 per unit. The relevant cost of manufacturing the motor to be considered in reaching the decision is

Explanation / Answer

Calculate relevant cost of manufacturing :

The relevant cost of manufacturing the motor to be considered in reaching the decision is $4.15 per unit

Direct material per unit 1.75 Direct labour per unit 1.65 Variable manufacturing overhead per unit 0.75 Total relevant manufacturing cost per unit 4.15

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.