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kkurt [141]
3 years ago
7

Sage Company is operating at 90% of capacity and is currently purchasing a part used in its manufacturing operations for $14.00

per unit. The unit cost for the business to make the part is $20.00, including fixed costs, and $12.00, not including fixed costs. If 38,493 units of the part are normally purchased during the year but could be manufactured using unused capacity, the amount of differential cost increase or decrease from making the part rather than purchasing it would be a
Business
1 answer:
romanna [79]3 years ago
5 0

Answer:

The correct answer to the following question will be "$76,986".

Explanation:

Although the organization is reportedly going to pay $14.00 per unit, even before manufactured throughout the corporation, cost and save per unit will become the variation among current value as well as production costs without set rate. The cost of operating expenses will not be included to measure the gain because the idle resources of the company would be included and would not raise the fixed costs.

Therefore the cost differential would be as follows:

⇒ Differential \ cost = (Current \ purchasing \ price-Manufacturing \ cost \ excluding  \ fixed \ cost)\times 38,493On putting the values in the above formula, we get

⇒                        =(14-12)\times 38,493

⇒                        =2\times 38,493

⇒                        =76,986

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The actual cost of direct materials is $10.50 per pound. The standard cost per pound is $11.75. 42) During the current period 10
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Answer:

Direct materials efficiency variance =  1175 unfavorable

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Explanation:

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direct materials efficiency variance

solution

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