Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.60 for direct materials and $1.15 for direct labor. Incremental overhead to make this part is $1.56 per unit. The company can buy the part for $4.54 per unit. (a) Prepare a make or buy analysis of costs for this part. Note: Enter your answers rounded to 2 decimal places. (b) Should Gelb make or buy the

Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.60 for direct materials and $1.15 for direct labor. Incremental overhead to make this part is $1.56 per unit. The company can buy the part for $4.54 per unit. (a) Prepare a make or buy analysis of costs for this part. Note: Enter your answers rounded to 2 decimal places. (b) Should Gelb make or buy the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.45 for direct materials and $1.00 for direct labor. Incremental overhead to make this part is $1.50 per unit. The company can buy the part for $4.15 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Make Buy Cost difference (b) Company should:
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ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A% merica AS... rk i Required information Use the following information for the Problems below. (Algo) [The following information applies to the questions displayed below.] Trini Company set the following standard costs per unit for its single product Direct materials (30 pounds @ $5.00 per pound) $ 150.00 98.00 Direct labor (7 hours @ $14 per hour) Variable overhead (7 hours @ $7 per hour) Fixed overhead (7 hours @ $9 per hour) Standard cost per unit Production (in units) Standard direct labor hours (7 DLH per unit) Budgeted overhead (flexible budget) Fixed overhead Variable overhead Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of the company's capacity of 51,000 units per quarter. The following additional information is available. 49.00 63.00 $360.00 70% 35,700 249,900 Direct materials (1,377,000 pounds @ $5.00 per pound)…
Ptarmigan Company produces two products. Product A has a contribution margin of $209.00 and requires 10 machine hours. Product B has a contribution margin of $124.20 and requires 6 machine hours. Determine the most profitable product assuming the machine hours are the constraint. If required, round your answers to two decimal places. Contribution margin per machine hour: Product A $fill in the blank 1 Product B $fill in the blank 2 Product is the most profitable.
(a) Prepare a make of buy uhury Gelb Co. currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.20 for direct materials and $0.75 for direct labor. Incremental overhead to make this part is $1.40 per unit. The company can buy the part for $3.50 per unit, (a) Prepare a make or buy analysis of costs for this (b) Should Gelb make or buy the part? part. Exercise 23-2 Make or buy P1