me File Edit View History Bookmarks People WindowHelp Assignments: ACG 2071 -CRN
ID: 2599637 • Letter: M
Question
me File Edit View History Bookmarks People WindowHelp Assignments: ACG 2071 -CRN ezto.mheducation.com/hm.tpx Chapter Quiz 3 × IG Aholt Corporation makes Question 30 (of 40) Aholt Corporetion makes 55,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials ect labor Veria Fixed manufacturing overhead ble manufacturing overhead 5.70 33.70 Unit product cost $83.90 An outside supplier has offered to sell the company all of these parts it needs for $70.20 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $330,000 per year If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $29.40 of the fixed manufacturing overhead cost being applied to the part would continue the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be to the company's remaining products. even if What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 55,000 units required each year? (Do not round intermediate O $83.90 per unit O $89.90 per unit O $6.00 per unit O $60.50 per unitExplanation / Answer
Costs that can be saved if outsourced = 55000*(18.80+25.70+5.70+4.30)= $ 2,997,500 Contribution that can be obtained by the alternative prodcut = $ 330,000 Total financial advantage if outsourced $ 3,327,500 Maximum price payable = financial advantage/number of units = 3327500/55000 = $ 60.50 Answer: $60.50 per unit.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.