FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The managerial accountant at Sellers Manufacturing produces a product, Part Z that the company uses to make multiple products at its facility in Virginia. The managerial accountant reported to the operations manager that 12% of its fixed overhead costs assigned to Part Z will not continue if Sellers Manufacturing outsources the production of Product Z at $44 per unit to Manufacturing World. The managerial accountant reported that to produce 1,200 units of Product Z, Sellers Manufacturing incurs the following costs:

Should Sellers Manufacturing produce Part Z or outsource it to Manufacturing World?

Sellers Manufacturing
Monthly Analysis: Part Z
Direct Materials
$28,000
Direct Labor
$6,400
Variable overhead costs
$18,000
Fixed overhead costs
$11,500
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Transcribed Image Text:Sellers Manufacturing Monthly Analysis: Part Z Direct Materials $28,000 Direct Labor $6,400 Variable overhead costs $18,000 Fixed overhead costs $11,500
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