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ryzh [129]
3 years ago
10

Gelb Company currently manufactures 40,000 units per year of a key component for its manufacturing process. Variable costs are $

1.95 per unit, fixed costs related to making this component are $65,000 per year, and allocated fixed costs are $58,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making 40,000 units and buying 40,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier
Business
1 answer:
KIM [24]3 years ago
8 0

Answer:

The correct answer is It should buy this component from the outside supplier.

Explanation:

Currently Manufacturing Variable Cost = Manufacturing Units × Variable Cost Per Unit

= 40,000 × $1.95 = $78,000

Fixed cost to making this component = $65,000

Cost To Buying this Component from a Supplier = Buying Cost from a Supplier Per Unit × Buying Unit

= 40,000 × $3.50 = $140,00 0

Total cost of Making the Unit = Variable Cost + Fixed Cost

= $78,000 + $65,000 = $143,000

Total cost Buying the Unit = $140,000

According to the Analysis, the cost of buying unit is less than the cost of making the units. So unit should be buy from the outsider.    

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xxTIMURxx [149]

Available options are:

A. direct channel.

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D. customer-service channel.

E. truck jobber channel.

Answer:

A. Direct channel.

Explanation:

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3 0
3 years ago
You own a building that has four possible uses: a cafe, a craft store, a hardware store, and a bookstore. The value of the build
Svetlanka [38]

Answer:

The opportunity cost = $2.5

Explanation:

Given:

You own a building that has four possible uses: a cafe, a craft store, a hardware store, and a bookstore. The value of the building in each use is $2,000; $3,000; $4,000; and $5,000, respectively.You decide to open a hardware store.

<u>Question asked:</u>

The <u>opportunity cost of using this </u><u>building for a hardware store</u> ?

<u>Solution:</u>

As we know:

Opportunity\ cost =\frac{What\ you\ sacrifice}{What\ you\ gain} \\ \\

What you sacrifice = Value of a cafe + Value of a craft store + Value of a bookstore

                              = $2000 + $3000 + $5000 = $10,000

What you gain = Value of a hardware store

                        = $4000

Thus, the opportunity cost of using this building for a hardware store is $2.5

7 0
3 years ago
Which of the following statements is CORRECT?
zaharov [31]

Answer:

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The dividend is shown while preparing the retained earning statement. So, it does not affect the net income.

The highly liquid marketable securities does not show a decline in the current assets

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Account receivable are reported in the current assets rather than the current liabilities

We know that

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If the dividend amount is more than the net income so the ending balance of retained earning will decline than its beginning year balance.

3 0
2 years ago
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Answer:

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Explanation:

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Luden [163]

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The relational DBMS makes more easy to access the values which is more specific in the database management system.

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