CoursHeroTranscribedText: Make-orBuv Decision, Alternatives, Relevant Costs Each year, Giada Company produces 14,000 units of a...
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CoursHeroTranscribedText: Make-orBuv Decision, Alternatives, Relevant Costs Each year, Giada Company produces 14,000 units of a component part used in tablet computers. An outside supplier has offered to supply the part for $13. The unlt cost is: Direct materials 50.82 Direct labor 0.33 Variable overhead 0.09 Fixed overhead E Total unit cost 3.84 Required: 1. What are the alternatlves for Giada Company? Make the part in house or bug the part externally v J 2. Assume that none of the xed cost ls avoidable. list the relevant cost[s] of internal productlon. Direct materials direct labor and variable overhead - J List the relevant costls) of external purchase. Purchase price v J 3. which alternative is more cost effective and by how much? Making the part in house ' v' by '5- V' 4. What #320,400 of fixed overhead is rental of equipment used only in production of the component that can be avolded if the component is purchased? which alternative is more cost effective and by how much? Bu in the art from the external su lier ' J by S- X
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