mpany currently manufactures 52,000 units per year of a key compa er unit, fixed costs related to making this component are $67,000 per d fixed costs are unavoidable whether the company makes or buys th ent from a supplier for $3.90 per unit. e the total incremental cost of making 52,000 units and buying 52,00 ent, or should it buy this component from the outside supplier? plete this question by entering your answers in the tabs below. o Make Costs to Buy Outside Supplier

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Gelb Company currently manufactures 52,000 units per year of a key component for its manufacturing process. Variable costs are
$7.35 per unit, fixed costs related to making this component are $67,000 per year, and allocated fixed costs are $82,500 per year. The
allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this
component from a supplier for $3.90 per unit.
Calculate the total incremental cost of making 52,000 units and buying 52,000 units. Should it continue to manufacture the
component, or should it buy this component from the outside supplier?
Complete this question by entering your answers in the tabs below.
Outside
Supplier
Calculate the total incremental cost of making 52,000 units. (Round "variable cost per unit" answers to 2 decimal places.)
Incremental Costs to Make
Relevant
Amount per
Unit
Costs to Make Costs to Buy
Variable cost per unit
Fixed manufacturing costs
Total incremental cost to make
Relevant
Fixed Costs
<Costs to Make
Total Relevant
Costs
$
0
Costs to Buy >
Transcribed Image Text:Gelb Company currently manufactures 52,000 units per year of a key component for its manufacturing process. Variable costs are $7.35 per unit, fixed costs related to making this component are $67,000 per year, and allocated fixed costs are $82,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 52,000 units and buying 52,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Outside Supplier Calculate the total incremental cost of making 52,000 units. (Round "variable cost per unit" answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Unit Costs to Make Costs to Buy Variable cost per unit Fixed manufacturing costs Total incremental cost to make Relevant Fixed Costs <Costs to Make Total Relevant Costs $ 0 Costs to Buy >
Gelb Company currently manufactures 52,000 units per year of a key component for its manufacturing process. Variable costs are
$7.35 per unit, fixed costs related to making this component are $67,000 per year, and allocated fixed costs are $82,500 per year. The
allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this
component from a supplier for $3.90 per unit.
Calculate the total incremental cost of making 52,000 units and buying 52,000 units. Should it continue to manufacture the
component, or should it buy this component from the outside supplier?
Complete this question by entering your answers in the tabs below.
Costs to Make Costs to Buy
Outside
Supplier
Calculate the total incremental cost of buying 52,000 units. (Round "purchase price per unit" answers to 2 decimal places.)
Incremental Costs to Buy
Relevant
Amount per
Unit
Purchase price per unit
Total incremental cost to buy
Relevant
Fixed Costs
< Costs to Make
Total Relevant
Costs
Outside Supplier >
Transcribed Image Text:Gelb Company currently manufactures 52,000 units per year of a key component for its manufacturing process. Variable costs are $7.35 per unit, fixed costs related to making this component are $67,000 per year, and allocated fixed costs are $82,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 52,000 units and buying 52,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Outside Supplier Calculate the total incremental cost of buying 52,000 units. (Round "purchase price per unit" answers to 2 decimal places.) Incremental Costs to Buy Relevant Amount per Unit Purchase price per unit Total incremental cost to buy Relevant Fixed Costs < Costs to Make Total Relevant Costs Outside Supplier >
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