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Home Q & A Board Other Fields Homework Help Business Accounting
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jboutdy jboutdy
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5 years ago
Rockford Company manufactures a part for use in its production of hats. When 10,000 items are produced, the costs per unit are:

Direct materials$0.75
Direct manufacturing labor3.00
Variable manufacturing overhead1.50
Fixed manufacturing overhead1.60
Total$6.85

Angel Company has offered to sell to Rockford Company 10,000 units of the part for $6.00 per unit. The plant facilities could be used to manufacture another item at a savings of $9,000 if Rockford accepts the offer. In addition, $1.00 per unit of fixed manufacturing overhead on the original item would be eliminated.

Required:
a.What is the relevant per unit cost for the original part?
b.Which alternative is best for Rockford Company? By how much?
Textbook 
Cost Accounting: A Managerial Emphasis

Cost Accounting: A Managerial Emphasis


Edition: 16th
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macbookpro1macbookpro1
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5 years ago
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jboutdy Author
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#2
5 years ago
Helps a lot... Now I'm ready for my quiz
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