Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. x company is considering buying a part next year t

X Company is considering buying a part next year that they currently produce. A company...

50.1K

Verified Solution

Question

Accounting

X Company is considering buying a part next year that they currently produce. A company has offered to supply this part for $16.60 per unit. This year's total production costs for 80,000 units of this part were:

Materials $560,000
Direct labor [all variable] 456,000
Variable overhead 240,000
Fixed overhead 96,000

Unavoidable fixed overhead costs are $64,320. If X Company buys the part, there is no alternative use for the idle resources. Production next year is expected to increase to 83,050 units.

If X Company continues to make the part instead of buying it, it will save how much?

Assume that X Company has an opportunity to negotiate the purchase price with the supplier. At what purchase price would X Company be indifferent between making and buying?

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

In the Deacon process for the manufacture of chlorine, HCl and O2 react to form Cl2...

Chemistry
Q

What is Experimen design statistic how to solve a question about it, and how to find...

Advance Math
Q

                                                Williams                                               Roberts Cash                                      160,000                                                 50,000 Inventory                            550,000                                                 160,000 Equipment                          1,500,000                                             670,000       Totals                             2,210,000                                             880,000 Totals Liabilities 740,000 280,000 c/s $20 par                          600,000                                                 300,000 other contr cap                 375,000                                                 105,000 retained earnings             495,000                                                 195,000        totals                             2,210,000                                             880,000 inventory has a FMV of 170,000 for Roberts and the...

Accounting
Q

Which of the following is the last step in solving a linear programming problem graphically?Identify...

Basic Math
Q

7. Given the following information, write the standard form equation of each hyperbola and determine...

Basic Math
Q

Find the derivative of f with respect to x of f(x) = In x ^15The...

Calculus
Q

The following adjusted trial balance was drawn from the records of the Dakota Company ...

Accounting
Q

Required information Problem 21-3A CVP analysis and charting LO P2, P3 (The following information applies...

Accounting
Q

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and...

Accounting
Q

On October 1, 2021, Helmsmith Corporation declared and issued a 10% common stock dividend. Before...

Accounting
Q

The inventory accounts for Billings, Incorporated for the years ending December 31, 2011, 2012 and...

Accounting
Q

SHORT ANSWER QUESTIONS 24. Justin Ball has developed a patent and wants to sell all...

Finance