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Author Question: The cost system of Charlton Frabricators indicates that a product cost $30 to make in house. Of that ... (Read 69 times)

yoroshambo

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on: Mar 6, 2021

Question 1

A company is considering buying a product at $15 per unit, the in-house manufacturing of the same product is $17. The fixed cost per unit is $3 is included in the $17 in-house product manufacturing cost. What should the company do in this scenario?

Question 2

The cost system of Charlton Frabricators indicates that a product cost $30 to make in house.  Of that $30 cost, $7 consists of plant costs that have already been paid for. A supplier proposes to make the same product for $26 but Charlton's plant will have idle time and  because of budgetary constraints, will not be retooled to take advantage of that idle time.  Should the product be outsourced to the supplier?
◦ No because the relevant cost for making the product is only $23 .
◦ Yes because the Supplier can produce the product for $4.00 less per unit than Charlton can.
◦ Yes because the Supplier can produce the product for $11.00 less per unit than Charlton can.
◦ No because the plant can be utilized for other purposes and either save the company even more money or produce additional revenue.
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by yoroshambo on Mar 6, 2021

bob

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Reply #1 on: Mar 6, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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yoroshambo

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Reply 2 on: Mar 6, 2021
YES! Correct, THANKS for helping me on my review

tkempin

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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