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Author Question: W.T. Ginsburg Engine Company manufactures part ACT31107 used in several of its engine models. ... (Read 75 times)

frankwu

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W.T. Ginsburg Engine Company manufactures part ACT31107 used in several of its engine models. Monthly production costs for 1,010 units are as follows:

Direct materials$41,000
Direct labor7,500
Variable overhead costs34,500
Fixed overhead costs18,000
Total costs$101,000

It is estimated that 7% of the fixed overhead costs assigned to ACT31107 will no longer be incurred if the company purchases ACT31107 from the outside supplier. W.T. Ginsburg Engine Company has the option of purchasing the part from an outside supplier at $94.75 per unit.

The maximum price that W.T. Ginsburg Engine Company should be willing to pay the outside supplier is 
________.
◦ $82 per ACT31107 part
◦ $83.43 per ACT31107 part
◦ $100 per ACT31107 part
◦ $101.25 per ACT31107 part


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Marked as best answer by frankwu on Mar 6, 2021

JCABRERA33

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frankwu

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Reply 2 on: Mar 6, 2021
Gracias!


sultana.d

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

 

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