CourseLover

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Teaching Since: May 2017
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  • MCS,MBA(IT), Pursuing PHD
    Devry University
    Sep-2004 - Aug-2010

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  • Assistant Financial Analyst
    NatSteel Holdings Pte Ltd
    Aug-2007 - Jul-2017

Category > Management Posted 19 Dec 2017 My Price 10.00

Variable selling costs for the ass

Will Company assembles products from a group of interconnecting parts.  The company produces some of the parts and buys some from outside vendors.  The vendor for Part X has just increased it price by 35 percent, to $10 per unit for the first 5,000 units and $9 per additional units ordered each year.  The company uses 7,500 units of Part X each year.  unit costs if the company makes the part are as follows.

Direct materials   $3.50

Direct labor            2.00

Variable overhead 4.00

Variable selling costs for the assembled product 3.75

Should Will Company continue to purchase Part X or begin making it?

Answers

CourseLover
(12)
Status NEW Posted 19 Dec 2017 04:12 PM My Price 10.00

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