Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. part 1: make or buy decisions mobility partners ma

Part 1: Make or Buy Decisions Mobility Partners makes wheelchairs and other assistive devices. For...

90.2K

Verified Solution

Question

Accounting

Part 1: Make or Buy Decisions

Mobility Partners makes wheelchairs and other assistive devices. For years it has made the rear wheel assembly for its wheelchairs. A local bicycle manufacturing firm, Trailblazers, Inc., offered to sell these rear wheel assemblies to Mobility. If Mobility makes the assembly, its cost per rear wheel assembly is as follows (based on annual production of 2,000 units):

Direct materials $ 30

Direct labor 52

Variable overhead 21

Fixed overhead 52

Total $ 155

Trailblazers has offered to sell the assembly to Mobility for $110 each. The total order would amount to 2,000 rear wheel assemblies per year, which Mobility's management will buy instead of make if Mobility can save at least $20,000 per year. Accepting Trailblazers's offer would eliminate annual fixed overhead of $41,100.

Required:

a. Using Excel, prepare a schedule that shows the total differential costs. Indicate if the differential cost is higher, lower or no effect under the assumption that Status Quo is the base.

b. Should Mobility make rear wheel assemblies or buy them from Trailblazers? Why? Be sure to provide a complete justification for your decision.

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: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

The average atomic weight of copper which has two naturally occurring isotopes is 63 5...

Physics
Q

Find the depth and top width of a triangular notch capable of discharging a maximum quantity of...

Civil Engineering
Q

Based on the structures of the fungus Gymnopilus ventricosus below, which phylum does it belong to? Spores A.)...

Biology
Q

For f x x and g x x find fog x and gof x Then...

Calculus
Q

The filament of an automobile headlight is at the focus of a parabolic reflector which...

Calculus
Q

12 Hassan makes two types of carpets The first type costs 3 for wool and...

Algebra
Q

Solve the following system of equations algebraically y x 14x 27 y 3x 1

Algebra
Q

The individual financial statements for Abbey Company and Bellstar Company for the year ending December...

Accounting
Q

Workbook Checklist To be completed before submitting. All values/title/information that could be linked were linked....

Accounting
Q

as the accountant for Monroe Trucking Company you are preparing the company's annual return form...

Accounting
Q

Rangers, Inc. acquires all of the outstanding common stock of Slowly Industries for $450,000 cash....

Accounting
Q

Pria's Music lessons on june 30 income summary

Accounting