1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
gogolik [260]
3 years ago
6

Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $15.00

per unit. The unit cost for the business to make the part is $22.00, including fixed costs, and $12.00, excluding fixed costs. If 38,423 units of the part are normally purchased during the year but could be manufactured using unused capacity, what would be the amount of differential cost increase or decrease from making the part rather than purchasing it?
Business
1 answer:
UNO [17]3 years ago
5 0

Answer:

$115,269 decrease

Explanation:

Below are the following information given in the question.

Purchase price = $15

Variable cost per unit = $12

Fixed cost per unit = $10. i.e $22-$10

Production in units = 38,423

N.B. As in the above scenario, we will need to factor in the variable cost per unit only in order to determine whether it is convenient to make the part in house or purchase it. Also, we will have to ignore fixed costs because of the fact that it is constant in the option of whether to buy or make part in house.

Therefore,

Option at purchasing/Buying

= $38,423 × $15

= $576,345

Option at making the part in house

= $38,423 × $12

= $461,076

Cost difference is therefore = $115,269 decrease

You might be interested in
What is the first step the manager takes when a subordinate is having difficulty carrying out a delegated task?
Andrew [12]
The qualifications of the person regarding the task
7 0
3 years ago
The extent to which the income from individual transactions is affected by fluctuations in foreign exchange values is known as
Salsk061 [2.6K]
<span>The extent to which the income from individual transactions is affected by fluctuations in foreign exchange values is known as Transaction Exposure.</span><span />
8 0
3 years ago
Read 2 more answers
QUESTION 15 One of the benefits of downsizing is: higher customer satisfaction. improved efficiency. a more loyal and productive
agasfer [191]
Improved efficiency.

A study shows that downsizing lowered customer satisfaction -
Another study shows that downsizing increased efficiency, but nothing of employee productivity.
5 0
2 years ago
What is one way we know about what accounting in the ancient world was like?
Degger [83]

Answer:

b

Explanation:

7 0
2 years ago
Read 2 more answers
What is the chronological order of the material cost flows through the subsidiary records? a. Materials Ledger Card, Receiving R
RoseWind [281]

Answer:

The correct order is option B.

Explanation:

As the order is in which the items are in the process of the subsidiary is given as by option B.

Option A is not true as the step of receiving report is not at the start of the process.

Option C is not true, because all the steps are not included.

Option D is not true as well because all the steps are not included.

5 0
3 years ago
Other questions:
  • Merticao, a French textile company, supplied most of its products to its primary market in Hestonia, a North American nation. Ho
    7·1 answer
  • The manager of your company's pension fund is compensated based entirely on fund performance; he earned over $1.2 million last y
    7·1 answer
  • With reference to a basic OB model, ________ are determined in advance of the employment relationship and refer to variables suc
    13·1 answer
  • Mia is concerned how her marketing activities will affect individual consumers as well as society at large. mia is implementing
    7·1 answer
  • For its top managers, Goldberg Industries formats its income statement as follows: GoldBerg Industries Contribution Margin Incom
    11·1 answer
  • In a population of 100 individuals, we have 25 people that are homozygous AA, 50 people that are heterozygous Aa, and 25 people
    12·1 answer
  • Managers transform a portion of organizational resources into appropriate organization member behavior mainly by performing acti
    11·1 answer
  • What is a bell attendant?
    10·1 answer
  • What best describes the difference between careers and industries
    9·1 answer
  • Electronic Wonders reports net income of $96,500. The accounting records reveal Depreciation Expense of $50,200 as well as incre
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!