Top Posters
Since Sunday
23
s
6
t
6
C
5
J
5
j
5
s
5
a
5
p
5
f
5
s
5
d
5
Home Q & A Board Other Fields Homework Help Business Accounting
New Topic  
onlineerica onlineerica
wrote...
Go to Answer
Posts: 67
Rep: 0 0
1 months ago
Power Tools, Inc. produces gas-powered leaf blowers. The company is currently not operating at full capacity. The plant manager is considering making the rewind assembly for the pull cord which is now being purchased from a supplier at $22 each. Power Tools already has the equipment to produce the assembly. The plant manager has analyzed the cost of producing the assemblies and determined that each assembly will require $8 of direct material, $6 of direct labor, and $12 of manufacturing overhead. Two-thirds of the manufacturing overhead is a fixed cost that would not be affected by the decision to manufacture the brackets. Should Paper Moon continue to purchase the brackets or produce them internally?
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
Author:
Read 7 times
1 Reply
Replies
Answer verified by a subject expert
TanjaGTanjaG
wrote...
#1
Posts: 80
Rep: 0 0
1 months ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
​​MakeBuy
Purchase price of assembly​​
Direct material$  8$22
Direct labor6​
Variable overhead (1/3 × $12)4​
Fixed overhead    8    8
Costs per unit$26$30

Power Tool should make the assembly rather than to continue purchasing the part from an outside supplier because the cost of making each assembly is $4 less than the purchase price.
1

Related Topics

onlineerica Author
wrote...

1 months ago
Just got PERFECT on my quiz
kc123
wrote...

Yesterday
Thanks
Butwhy
wrote...

2 hours ago
Correct Slight Smile TY
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  427 People Browsing
 292 Signed Up Today
Start New Topic Take the Tour Study Tips Study ToolsNew Topics Trending Browse by Textbook
Related Images
  
 426
  
 238
  
 167