Penagos Corporation is presently making part Z43 that is used in one of its products. A total of 5,000 units of this part are produced and used every year. The company's Accounting Department reportsthe following costs of producing the part at this level of activityPerUnitSkippedDirect materials$1.10Direct labor$3.10Variable overheadSupervisor's salaryDepreciation of special equipmentAllocated general overhead$6.90$5.80$5.20$5.60An outside supplier has offered to produce and sell the part to the company for $20.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can beavolded. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entirecompany. If the outside supplier's offer were accepted, only $4,000 of these allocated general overhead costs would be avoided.If management decides to buy part Z43 from the outside supplier rather than to continue making the part, what would be the annual financial advantage (disadvantage)?Multiple Cholce($34,500)($30,500)($15.500)8 of 9Next >McGrawHill< Prev11:51 AM68°F Mostly cloudyType here to search10/13/2021国DELLInsertPgUpPgDnF9F10F11F12PrtScrDeleteF5F6F7F8F1F2F3F4NumLock%23%24Backspace00

Make or buy is the decision to be made by the entities to decide that the products if made will be…

in one of fts products. A total of 5,000 units of this part are produced and used every year. The company's Accounting Department reports e following costs of producing the part at this level of activity: Per Direct materials Unit $1.10 Direct labor $3.10 Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead $6.90 $5.80 $5.20 $5.60 in outside supplier has offered to produce and sell the part to the company for $20.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be Voided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $4,000 of these allocated general overhead costs would be avoided. f management decides to buy part Z43 from the outside supplier rather than to continue making the part, what would be the annual financial advantage (disadvantage)? Multiple Cholce ($34,500) ($30,500) ($15,500

in one of fts products. A total of 5,000 units of this part are produced and used every year. The company's Accounting Department reports e following costs of producing the part at this level of activity: Per Direct materials Unit $1.10 Direct labor $3.10 Variable overhead Supervisor's salary Depreciation of special equipment Allocated general overhead $6.90 $5.80 $5.20 $5.60 in outside supplier has offered to produce and sell the part to the company for $20.80 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be Voided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $4,000 of these allocated general overhead costs would be avoided. f management decides to buy part Z43 from the outside supplier rather than to continue making the part, what would be the annual financial advantage (disadvantage)? Multiple Cholce ($34,500) ($30,500) ($15,500

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 5CE: Johnston Company cleans and applies powder coat paint to metal items on a job-order basis. Johnston...

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