70.2K

Verified Solution

Link Copied!

Haver Company currently pays an outside supplier $31 per unit for a part for one of its products. Haver is considering two alternative methods of making the part. Method 1 for making the part would require direct materials of $13 per unit, direct labor of $16 per unit, and incremental overhead of $3 per unit. Method 2 for making the part would require direct materials of $13 per unit, direct labor of $10 per unit, and incremental overhead of $7 per unit. Required: 1. Compute the cost per unit for each alternative method of making the part. 2. Should Haver make or buy the part? If Haver makes the part, which production method should it use? Complete this question by entering your answers in the tabs below. Compute the cost per unit for each alternative method of making the part. Should Haver make or buy the part? If Haver makes the part, which production method should it use? Hip Manufacturing produces denim clothing. This year it produced 3,260 denim jackets at a cost of $97,800. These jackets were damaged in the warehouse during storage. Management identified three alternatives for these jackets. 1. Jackets can be sold as scrap to a secondhand clothing shop for $19,560. 2. Jackets can be disassembled at a cost of $6,520 and sold to a recycler for $39,120. 3. Jackets can be reworked and turned into good jackets. The cost of reworking the jackets will be $110,840, and the jackets can then be sold for $146,700. Required: (1) Compute the income for each alternative. (2) Which alternative should be chosen

Answer & Explanation Solved by verified expert

See Answer