YouTube- 2017)- Gonnect R ACCT 2060 CH 12 HOMEWORK EX 12-11 F. Saved Help Save&

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YouTube- 2017)- Gonnect R ACCT 2060 CH 12 HOMEWORK EX 12-11 F. Saved Help Save& Exit Submit Check my work Han Products manufactures 34,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials Direct labor Variable nanufacturing overhead Pixed manufacturing overhead Total cost per part $ 3.80 11.00 2.20 s 23.00 eBook Print References An outside offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $84,000 However, Han Products has determined that two-thirds of the fix even if part S-6 were purchased from the outside supplier. supplier has offered to sell 34,000 units of part S-6 each year to Han Products for $21 per part.If Han Products accepts this ed manufacturing overhead being applied to part S-6 would continue Required: at is the financial advantage (disadvantage) of accepting the outside suppliers offer?

Explanation / Answer

Make Buy Direct Materials(34,000@3.80) 129200 Direct Labor (34,000@11) 374000 Variable mafg O/Head 74800 Fixed Mafg O/H (traceable) 34000*6/3 68000 Outside Purchase Price 714000 Rental value of space(Opp.cost) 84000 Total Cost 730000 714000 Profit increase for buying (Financial Advantage) 730000-714000 16000

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