4) Spahr Company produces a part that is used in the manufacture of one of...
80.2K
Verified Solution
Link Copied!
Question
Accounting
4) Spahr Company produces a part that is used in the manufacture of one of its products. The unit manufacturing costs of this part, assuming a production level of 5,000 units, are as follows: Direct materials $2.00 Direct labor $4.00 $3.00 $1.00 $10.00 Variable manufacturing otserhead Fixed manufacturing overhead Total cost The fixed overhead costs are unavoidable. Assuming Spahr Company can purchase 5,000 units of the part from Sexton Company for $13 each, and the facilities currently used to make the part could be rented out to another manufacturer for $24,000 a year, what should Spahr Company do? A) Buy the part and save $0.80 per unit. C) Make the part and save $2.20 D) Make the part and save $4.20 per unit. B) Buy the part and save $1.80 per unit. per unit.
costs of this part. acenwiat roducts. The unit martufacturing Assuming Spahr Company can purchase 5,000 units of the part from Sexton Company for $13 each, and the facilities currently used to make the part could be rented out to another manufacturer for $24,000 a year, what should Spahr Company do? A) Buy the part and save $0.80 per unit. B) Buy the part and save $1.80 per unit. C) Make the part and save $2.20 per unit. D) Make the part and save $1.20 per unit
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
