570 is used in one of Broce Corporation's products. The company's Accounting Department reports the following costs of producing the 9,000 units of the part that are needed every year. $15.60 $6.40 $5.40 $1.80 $5.50 Per Unit Direct materials Direct labor Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead $3.20 An outside supplier has offered to make the part and sell it to the company for $23.5 each. If this offer is accepted, the supervisor's salary and all of the variable costs 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. If the outs…
570 is used in one of Broce Corporation's products. The company's Accounting Department reports the following costs of producing the 9,000 units of the part that are needed every year.
$15.60
$6.40
$5.40
$1.80
$5.50
Per Unit
Direct materials
Direct labor
Variable
Supervisor's salary
Depreciation of special equipment
Allocated general overhead
$3.20
An outside supplier has offered to make the part and sell it to the company for $23.5 each. If this offer is accepted, the supervisor's salary and all of the variable costs 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. If the outs…
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