Every year Cheyenne Industries manufactures 8,000 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total Pharoah, Inc., has offered to sell 8,000 units of part 231 to Cheyenne for $32 per unit. If Cheyenne accepts Pharoah's offer, its freed-up facilities could be used to earn $13,700 in contribution margin by manufacturing part 240. In addition, Cheyenne would eliminate 40% of the fixed overhead applied to part 231. (a) $3.00 9.00 7.00 10.00 $29.00 Your answer is partially correct. Calculate total relevant cost to make and net cost to buy. Total relevant cost to make $ Net relevant cost to buy $ 120000 242300 I SUPE

Every year Cheyenne Industries manufactures 8,000 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total Pharoah, Inc., has offered to sell 8,000 units of part 231 to Cheyenne for $32 per unit. If Cheyenne accepts Pharoah's offer, its freed-up facilities could be used to earn $13,700 in contribution margin by manufacturing part 240. In addition, Cheyenne would eliminate 40% of the fixed overhead applied to part 231. (a) $3.00 9.00 7.00 10.00 $29.00 Your answer is partially correct. Calculate total relevant cost to make and net cost to buy. Total relevant cost to make $ Net relevant cost to buy $ 120000 242300 I SUPE

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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