Grand Limited currently produces a component of a product with the following per unit production...
90.2K
Verified Solution
Link Copied!
Question
Accounting
Grand Limited currently produces a component of a product with the following per unit production costs:
| Direct materials | $18.93 |
| Direct labour | 32.35 |
| Overhead | 20.74 |
| Total production costs | $72.02 |
Grand Ltd. currently manufactures these components in-house, averaging production of 29196 units each year. A supplier has approach the company offering to supply 29196 units each year at a cost of $53.12 each.
60% of the overhead is fixed and if Grand Ltd. purchases the components, then 1/3 of the fixed overhead costs would be avoidable.
What is the maximum price that Grand should pay per unit for the component?
Select one:
a. $72.02
b. $63.72
c. $58.19
d. $59.58
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!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.