Han products manufactures 30,000 units of part s-6 each year for use

Han Products manufactures 30,000 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 as follows:

 

Direct materials …………..                      $  3.60

Direct labor …………….                          $10.00

Variable manufacturing overhead     $  2.40
Fixed manufacturing overhead ..       $  9.00

Total cost per part …………                  $25.00

 

An outside supplier has offered to sell 30,000 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 $80,000. 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.

Computations showing how much profit will increase or decrease if the outside supplier’s offer is accepted is required.

 

 

Calculate your order
Pages (275 words)
Standard price: $0.00
Client Reviews
4.9
Sitejabber
4.6
Trustpilot
4.8
Our Guarantees
100% Confidentiality
Information about customers is confidential and never disclosed to third parties.
Original Writing
We complete all papers from scratch. You can get a plagiarism report.
Timely Delivery
No missed deadlines – 97% of assignments are completed in time.
Money Back
If you're confident that a writer didn't follow your order details, ask for a refund.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00
Power up Your Academic Success with the
Team of Professionals. We’ve Got Your Back.
Power up Your Study Success with Experts We’ve Got Your Back.