PXG is a golf company that manufactures high-end irons. The company currently pays an outside supplier $45 per unit for the stock shaft of its Gen 5 iron line. PXG can sell each of these. irons for $225 each. The company is considering two alternative methods of making the part. The company's predetermined overhead rate is 100% of direct labor costs. PXG's manufacturing costs are listed below. Method 1 Direct Material Cost per unit $20 per unit Direct Labor Cost ?? Overhead cost $15 per unit $10 per unit Incremental overhead $8 per unit $5 per unit • Should PXG make or continue to buy the part from an outside supplier? If PXG will earn more profit making the part, which method is most profitable? • Complete the incremental analysis using an Excel worksheet to show the most profitable solution. Method 2 $25 per unit ??

PXG is a golf company that manufactures high-end irons. The company currently pays an outside supplier $45 per unit for the stock shaft of its Gen 5 iron line. PXG can sell each of these. irons for $225 each. The company is considering two alternative methods of making the part. The company's predetermined overhead rate is 100% of direct labor costs. PXG's manufacturing costs are listed below. Method 1 Direct Material Cost per unit $20 per unit Direct Labor Cost ?? Overhead cost $15 per unit $10 per unit Incremental overhead $8 per unit $5 per unit • Should PXG make or continue to buy the part from an outside supplier? If PXG will earn more profit making the part, which method is most profitable? • Complete the incremental analysis using an Excel worksheet to show the most profitable solution. Method 2 $25 per unit ??

Name: am. 121. Make or Buy?PXG is a golf company that manufactures high-end
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Description: am. 121. Make or Buy?PXG is a golf company that manufactures high-end irons. The company currently pays anoutside supplier $45 per unit for the stock shaft of its Gen 5 iron line. PXG can sell each of these.irons for $225 each. The company is conside

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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