Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the paver corporation produces an executive jet fo

The Paver Corporation produces an executive jet for which it currently manufactures a fuel valve; the...

90.2K

Verified Solution

Question

Accounting

The Paver Corporation produces an executive jet for which itcurrently manufactures a fuel valve; the cost of the valve isindicated below:

Cost per Unit
Variable costs
Direct material$956
Direct labor643
Variable overhead306
Total variable costs$1,905
Fixed costs
Depreciation of equipment502
Depreciation of building186
Supervisory salaries289
Total fixed costs977
Total cost$2,882


The company has an offer from Duvall Valves to produce the part for$1,996 per unit and supply 910 valves (the number needed in thecoming year). If the company accepts this offer and shuts downproduction of valves, production workers and supervisors will bereassigned to other areas where, unfortunately, they really are notneeded. The equipment cannot be used elsewhere in the company, andit has no market value. However, the space occupied by theproduction of the valve can be used by another production groupthat is currently leasing space for $56,050 per year.

Should the company make or buy the valve?

Answer & Explanation Solved by verified expert
4.2 Ratings (662 Votes)
AnswerThe company should make the valve due to lest cost in making the productIf the company is buy the valve from outside supplier total loss will be 26760 ExplanationExtra cost    See Answer
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: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

The data given to the right includes data from 33 candies and 6 of them...

Basic Math
Q

Define the terms accuracy and precision. Give examples which illustrate the difference between terms.

Chemistry
Q

With the limitation in glenohumeral joint motion presented in Part E, case 1, describe how you...

Biology
Q

q= K^1/3 L^1/3 w=$2, V=$16, k=27, p=$32 a)what's the firm level of labor and profit? b)what'd you...

Economics
Q

In my legal and regulatory aspects of healthcare class the question is... What is the purpose and...

General Management
Q

c energy e energy production in stars Kerala CEE 20 d 1 1 The approximate...

Physics
Q

A sample of air has the following parameters pressure is 150 kPa volume is 5...

Physics
Q

During the fourth quarter of 2020, Dorsey Enterprises Corp. decided to invest excess cash in...

Accounting
Q

Cavy Company completed 14,900 units during the year at a cost of $834,400. The beginning...

Accounting
Q

QUESTION: Prepare a balance sheet and income statement as of December 31, 2014. EVERYTHING NEEDED...

Accounting
Q

Brief Exercise 155 annual operating activity bases are: direct Colby Company estimates that annual manufacturing...

Accounting
Q

Is the current market a Bull market or Bear Market ( MACD , MAU) II...

Finance