Calculate the total relevant cost

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Reference no: EM131212791

Freeman Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,300 containers follows. Unit-level materials $ 6,200 Unit-level labor 6,700 Unit-level overhead 3,800 Product-level costs* 7,200 Allocated facility-level costs 27,000 *One-third of these costs can be avoided by purchasing the containers. Baxi Container Company has offered to sell comparable containers to Freeman for $2.50 each. PLEASE SHOW WORK!

Required a-1. Calculate the total relevant cost.

a-2. Should Freeman continue to make the containers? Yes correct

b-1. Freeman could lease the space it currently uses in the manufacturing process.

If leasing would produce $12,700 per month, Calculate the total avoidable costs.

b-2. Should Freeman continue to make the containers?

Reference no: EM131212791

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