Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 10. xyz company is currently producing 10,000 unit

10. XYZ Company is currently producing 10,000 units of Part #43 each year. In benchmarking...

50.1K

Verified Solution

Question

Accounting

image

10. XYZ Company is currently producing 10,000 units of Part #43 each year. In benchmarking the costs for Part #43, XYZ discovered an outside supplier could provide 10,000 units at $22.25 each. The costs of Part #43 are as follows: $12.75 1.60 Direct materials Direct labor Variable overhead Fixed overhead Total 4.35 6.30 $25.00 Of the fixed overhead, $32,000 is directly traceable to the production of Part #43; the remainder is allocated costs of the factory and general staffing costs. The space used to manufacture Part #43 would remain unused if XYZ does not produce the part. What would be the change in profits if XYZ bought the part from the outsider? a. $27,500 increase b. $3,500 decrease c. $35,500 decrease d. no change e. None of the above are correct

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students