X company is uncertain what next years required production

Reference no: EM13567405

X Company is considering buying a part next year that they currently make. This year's total production costs for 11,400 units of this part were:

Materials	$44,232
Direct labor	42,750
Variable overhead	35,340
Fixed overhead	41,040

A company has offered to supply this part for $12.78 per unit. If X Company buys the part, $9,029 of the fixed overhead can be avoided, but there is no alternative use of the freed-up resources. Production next year is expected to be the same as this year.

1. The costs of making the part are less than the costs of buying the part by

2. X Company is uncertain what next year's required production will be. At what production level will X Company be indifferent between making and buying the part?

Reference no: EM13567405

Questions Cloud

Critically examine the contrasting approaches to the causes : essay questionits the institutions stupid d.rodrikcritically examine the contrasting approaches to the causes of growth

The present market value of the bonds is 1125 if the bonds : alaska power company issued 1000 bonds that have an annual coupon rate of 7.5. the present market value of the bonds is

What is the expected rate of return on a bond that matures : what is the expected rate of return on a bond that matures in 8 years has a par value of 1000 a coupon rate of 12 and

To what extent has entitlement theory become a complete and : essay questionto what extent has entitlement theory become a complete and widely accepted view about the reasons for

X company is uncertain what next years required production : x company is considering buying a part next year that they currently make. this years total production costs for 11400

You own a portfolio that is invested 38 percent in stock a : you own a portfolio that is invested 38 percent in stock a 43 percent in stock b and the remainder in stock c. the

In the assembly department direct labor hours are used to : mitchell s softball gloves company estimated the following at the beginning of the year assembly department testing

The bank pays a quarterly dividend of 165 on this stock : preferred stock valuation the first bank of ellicott city has issued perpetual preferred stock with a 100 par value.

What are the salient differences between cash flow and net : what are the salient differences between cash flow and net

User Account

All Pages