Social Studies, 06.05.2021 17:40 gretchcampbell
The management uf Mulligan Manufacluring Company is trying lo decide whether lo continue manufacturing a part or io buy it from an oulside supplier. The part, called QTHAFEE, is a compxonent of the company's finished pruduct. The lullowing information was collecied from the sccounting records and production data for the year ending December 31, 2019. 1. 6.000 units of QTILAFEE were procuced in the Machining Department. 2. Variable manufacturing applicable production of each QTILAFEE unit were: direct materials $5.00, direct labor $4.60. indirect labor S0.40, utilities S0.30.(10.3) 3. Fixed manufacturing costs applicable to the production of QTIIAFEE were: S5,000 direct and $3,400 allocated. All variable manufacturing and direct fixed costs will be eliminated if QTILAFEE is purchased. Allocated costs will have to be absorbed by other production departments. 4. The lowest quotation for 6,000 QTILAFEE units from a supplier is S56.000. 5. If QTHAFEE urnits are purchased, freight and inspeclion costs would be S0.40 per unil, recciving cosis kotaling $8(K) per year would be incurred by the Machining Ixpartment, and Mulligan Company has the opportunity lo produce$12.X00 of net icome with the facilities currently being used to manufacture QTHAFEE. What is the effect of buy-not-make decision on profit?β
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The management uf Mulligan Manufacluring Company is trying lo decide whether lo continue manufacturi...
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