Roserik corporation uses part a55 on one of its product the

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Reference no: EM13610599

Roserik Corporation uses part A55 on one of its product. The company's accounting department reports the following cost of producing 4,000 units of the parts that are needed yearly. Direct materials $2.80 Direct Labor $6.30 Variable overhead $8.50 depreciating of special equipment $6.80 allocated General overhead $6.10 An outside supplier has offered to make the part and sell it to the company for $ 32.30 each. If this offer is accepted the supervisor salary and all of the variables costs including direct labor, can be avoided. The special equipment was purchased many years ago and have no salvage value. Prepare a report that shows the affect on the company total net income of buying part A55 from the supplier rather than continuing producing.

Reference no: EM13610599

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