Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. make-or-buy, traditional analysis wehner company i

Make-or-Buy, Traditional Analysis Wehner Company is currently manufacturing Part ABS-43, producing 58,400 units annually. The...

50.1K

Verified Solution

Question

Accounting

Make-or-Buy, Traditional Analysis

Wehner Company is currently manufacturing Part ABS-43, producing 58,400 units annually. The part is used in the production of several products made by Wehner. The cost per unit for ABS-43 is as follows:

Direct materials $45.65
Direct labor 10.55
Variable overhead 3.50
Fixed overhead 3.00
Total $62.70

Of the total fixed overhead assigned to ABS-43, $15,301 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Wehner for $59.51. There is no alternative use for the facilities currently used to produce the part. No significant non-unit-based overhead costs are incurred.

Required:

1. Should Wehner Company make or buy Part ABS-43? Wehner should

makebuy

the part. This will produce total cost savings of $fill in the blank 2.

2. What is the maximum amount per unit that Wehner would be willing to pay to an outside supplier? Round your answer to the nearest cent. $fill in the blank 3 per unit

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

Chemistry
1.2K views

Pre-lab questions: Q 1. Based on the Three Source of Error Three sources of error in acid-base...

Physics
1.2K views

An elevator at the bottom of a 80 foot shaft weighs 1500 pounds. The 80 foot...

Biology
1.2K views

Which of the following events do biologists consider a random change OA disruptive selection OB...

Basic Math
1.2K views

Monica's checkbook register balance is $456.98. She has written checks in the amounts of $10.00,...

Basic Math
1.2K views

A red candle is 8 inches tall and burns at a rate of 7/10 inch...

Algebra
1.2K views

ols org bookmarks go solve 16266749 kphillips surfaceAreaFromANet OER Project Home A21ST century libr m...

Accounting
1.2K views

Give me a post that has never been posted: Accounting is often referred to as...

Accounting
1.2K views

Keatts Corporation owns a machine that was purchased 3 years ago. The company spent $7,000...

Accounting
1.2K views

part 1 Part 2 Assume the same facts as...

Accounting
1.2K views

A promissory note with a face value of $12,300 is written on February 22, 2015...

Accounting
1.2K views

Vista Company is considering two new projects, each requiring an equipment investment of $97,000. Each...

Accounting
1.2K views

The following information is taken from Reagan Company's December 31 balance sheet: Cash and cash...