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Business, 27.02.2020 20:17 sawyerharper
The Camel Company produces 10,000 units of item Roto 454 annually at a total cost of $190,000.
Direct materials $ 20,000
Direct labor 55,000
Variable overhead 45,000
Fixed overhead 70,000
Total $ 190,000
The Yukon Company has offered to supply 10,000 units of Roto 454 per year for $18 per unit. If Camel accepts the offer, $4 per unit of the fixed overhead would be saved. In addition, some of Camel's facilities could be rented to a third party for $15,000 per year.
Required:
1. What are the relevant costs for the "make" alternative?
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Answers: 3
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The Camel Company produces 10,000 units of item Roto 454 annually at a total cost of $190,000.
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