Assuming that a new product will generate a segment margin

Reference no: EM13599861

Assuming that a new product will generate a segment margin of $65,000 per year could be produced if the part were purchased, should the offer be accepted? Show computations.

Per Part 15,000 parts per year
Direct Materials: $6 $90,000
Direct Labo 8 120,000
Variable manufacturing 1 15,000
overhead
Fixed manufacturing
overhead, traceable $5 75,000
Fixed manufacturing
overhead, common $10 150,000
Total Cost $30 $450,000

Reference no: EM13599861

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