Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. rebelo corporation is presently making part e07 th

Rebelo Corporation is presently making part E07 that is used in one of its products....

80.2K

Verified Solution

Question

Accounting

image

Rebelo Corporation is presently making part E07 that is used in one of its products. A total of 17,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Direct materials Direct labor Variable manufacturing overhead Supervisor's salary Depreciation of special equipment Allocated general overhead Per Unit $ 3.80 $ 3.80 $ 1.10 $ 2.50 $ 1.40 $ 8.60 An outside supplier has offered to make and sell the part to the company for $20.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. If management decides to buy part E07 from the outside supplier rather than to continue making the part, what would be the annual impact on the company's overall net operating income

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!
Become a Member

Other questions asked by students

Q

What are the conditions required to apply the multiple regression test? how to apply it using ANOVA...

Statistics
Q

explain the effects of pneumococcal pneumonia on the respiratory tract. You should mention specific cell types...

Medical Sciences
Q

Why most sets of Christmas (holiday) lights say not to connect more than 3 strands together?...

Electrical Engineering
Q

JEE Main 2018 Two batteries with e m f 12 V and 13 V are...

Physics
Q

Find how many quarts of 4 butterfat milk and 1 butterfat milk should be mixed...

Algebra
Q

QUESTION ONE On 30 June 2017, Kylie sold her investment apartment for...

Accounting
Q

The following information applies to the questions displayed below.] Onslow Co. purchased a used machine...

Accounting
Q

Identify an industry and list five factors that will affect future profitability and risk.

Accounting
Q

om Help Save& Exit Submit Check my Sharp Company manufactures a product for which the...

Accounting
Q

A prior period adjustment should be reflected, net of applicable income taxes, in the financial...

Accounting
Q

Kingbird Assets Inc., a publicly listed company, has a building with an initial cost of...

Accounting
Q

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage...

Accounting