Business, 20.11.2020 16:50, itzmelanie1
Han Products manufactures 34,000 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:Direct materials $ 3.80Direct labor 11.00Variable manufacturing overhead 2.20Fixed manufacturing overhead 6.00Total cost per part $ 23.00An outside supplier has offered to sell 34,000 units of part S-6 each year to Han Products for $21 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 $84,000. 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 supplier. Required:What is the financial advantage (disadvantage) of accepting the outside supplier’s offer?
Answers: 3
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Han Products manufactures 34,000 units of part S-6 each year for use on its production line. At this...
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