Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 11 Aug 2017 My Price 4.00

Ford Automobiles

Ford Automobiles uses a standard part in the manufacture of sevral of its trucks. The cost producing 40,000 parts is $120,000, which includes fixed cost of $60,000 and variable costs of $60,000. The company can buy the part from an outside supplier for $3.00 per unit, and avoid 30% of the fixed costs.

 

Assume the factory space freed up by purchasing the part from an outside source can be used to manufacture another product that can be sold for $12,000 profit. If Harvey Automobiles makes the part, what will its operating income be?

Answers

Maurice Tutor
(5)
Status NEW Posted 11 Aug 2017 12:08 PM My Price 4.00

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