Should the part be purchased from the outside supplier

Assignment Help Managerial Accounting
Reference no: EM132798215

Question - Sun Company is thinking of buying from an outsider supplier a part it needs in its manufacturing process. Currently the company is making the part internally. The relevant cost per part of making the part is $23 (excluding any opportunity cost). It needs 750 parts per month and could buy these from the outside supplier at $27 per part. If it buys the part from the outside supplier it could rent out the factory space currently being used to make the part for $2,500 per month.

Required -

A. Give the dollar amount of the total opportunity cost (per month) of making the part internally.

B. Should the part be purchased from the outside supplier?

Reference no: EM132798215

Questions Cloud

Define futuristic model and architecture for cloud computing : Provide 2 page documentation on Futuristic model and Architecture for Cloud Computing. The paper should include body and reference page.
What is the equivalent annual saving : What is the equivalent annual saving from the purchase if Gluon can depreciate 100% of the investment immediately.
What is the npv of the replacement project : PC Shopping Network may upgrade its modem pool. It last upgraded 2 years ago, when it spent $85 million on equipment with an assumed life
Explain how your selected technology can be used : Many modern programs and technologies are used for organizing, manipulating, analyzing, and visualizing data. Your assignment is to research.
Should the part be purchased from the outside supplier : The relevant cost per part of making the part is $23 (excluding any opportunity cost). Should the part be purchased from the outside supplier
Describe the consumer decision-making process : Discuss how the doctor''s information is positioned to make him or her a good choice and What types of information do you feel are missing
Describe the three key client-related factors : List and describe the three key client-related factors that the advisor is required to consider when developing a "suitable" investment portfolio
Stock a rational and risk-averse investor : According to the mean-variance dominance principle, which stock a rational and risk-averse investor will choose from stocks A, B and C?
Prepare all the necessary journal entries for the sale : Based on information above, prepare all the necessary journal entries for the sale of the investment on January 1, 2021

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Find what would be the net operating income

Find what would be the net operating income? If the selling price increases by $2 per unit and the sales volume decreases by 100 units

  Should the company accept or reject the order

Consider the new information on activity costs associated with the layoff. Should the company accept or reject the order? Provide supporting computations.

  What is the amount of cost per equivalent unit

What is the amount of cost per equivalent unit for direct materials using the weighted-average method and Why is the weighted-average method preferred

  Calculate the return on assets ratios for the company

Large traded companies like Target, Ford, Apple, etc. are easy to find this type of information on. We recommend you go straight to Hoover's Pro database to find a company profile. This database is the best database available for this type of info..

  How would a manager determine the profit-maximizing price

According to economic theory, how would a manager determine the profit-maximizing price for a product or service?

  Determine the cost of the goods transferred out

During the most recent accounting period, the company's finishing department, Determine the cost of the goods transferred out of the finishing department.

  Identify company achieve plans in each of bsc perspectives

Goodall Corporation, Identify three measures that you could use to help the company achieve its plans in each of the BSC perspectives.

  How important is to trace costs appropriately

How important is it to trace costs appropriately? Explain. As you are beginning to think about the importance of tracing costs appropriately

  How much overhead is assigned to product one each year

Using ABC, how much overhead is assigned to Product One each year? Swifty Co. incurs $533000 of overhead costs each year in its three main departments

  Find which perspective of the balanced scorecard

Company's information system for use by customer service representatives may be an example of measuring which perspective of the balanced scorecard?

  Production cost variances

When determining end of period production cost variances, which of the following product costs components will require flexing?

  Compute the unit product cost of one bike

Compute the unit product cost of one bike under absorption costing system. Fixed manufacturing overhead expenses: $1200,000

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd