Golden, Inc. has been manufacturing 5,000 units of Part 10541, which is used in one...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Golden, Inc. has been manufacturing 5,000 units of Part 10541, which is used in one of its products. At this level of production, the unit product cost of Part 10541 is as follows:
Direct Materials
$2
Direct Labour
$8
Variable Manufacturing Overhead
$4
Fixed Manufacturing Overhead
$6
Unit Product Cost
$20
Brown Company has offered to sell Golden 5,000 units of Part 10541 for $19 a unit. Golden has determined that two-thirds of the fixed manufacturing overhead will continue even if Part 10541 is purchased from Brown. Assume that direct labour is an avoidable cost in this decision. To determine whether to accept Brown's offer, what are the relevant costs to Golden of manufacturing the parts internally? (Do not round intermediate calculations.)
Multiple Choice
$70,000
$95,000
$80,000
$90,000
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!
