Han Products manufactures 25,000 units of part S-6 each year for
use on its production line. At this level of activity, the cost per
unit for part S-6 is:
| Fixed manufacturing|
| Total cost per|
An outside supplier has offered to sell 25,000 units of part S-6
each year to Han Products for $46.00 per part. If Han Products
accepts this offer, the facilities now being used to manufacture
part S-6 could be rented to another company at an annual rental of
$632,500. However, Han Products has determined that two-thirds of
the fixed manufacturing overhead being applied to part S-6 would
continue even if part S-6 were purchased from the outside
Calculate the per unit and total relevant cost for buying and
making the product? (Round your "per unit" answers to 2
|b.||How much will profits increase|
or decrease if the outside supplierAc??cs offer is accepted?
Profit would _______ by ___________.
This question was answered on: Dec 08, 2020
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