ACC 543 help A Guide to career/uophelp.com ACC 543 help A Guide to career/uophelp.com | Page 3

ACC 543 Week 1 Individual Textbook 4.16, 4.18, 4.20
For more course tutorials visit
www.uophelp.com
Relevant Cost and Decision Making
4.16
Make or buy Yoklic Corporation currently manufactures a subassembly
for its main product. The costs per unit are as follows:
Regina Corp has contacted Yoklic with an offer to sell it 5,000
subassemblies for $55.00 each.
REQUIRED:
Should Yoklic make or buy the subassemblies? Create a schedule that
shows the total quantitative differences between the two alternatives.
The accountant decided to investigate the fixed costs to determine
whether any incremental changes would occur if the subassembly were
no longer manufactured. The accountant believes that Yoklic will
eliminate $50,000 of fixed overhead if it accepts the proposal. Does this
new information change the decision? Show your calculations.
Ignore the information in part (B). Now suppose Yoklic could use the
capacity released under the buy alternative to make a different
subassembly that it currently purchases from a vendor for $20. The
manufacturing engineer believes that the company can use the existing
equipment to manufacture the subassembly for $13 each (direct
materials, direct labor, and variable overhead). The firm uses about