Fixed costs: Administration $ 63,450 $ 65,500 Rent $ 65,317 $ 63,904 6. Question:( TCO H) Lindon Company uses 7,500 units of Part Y each year as a component in the assembly of one of its products. The company is presently producing Part Y internally at a total cost of $ 119,000 as follows. Direct materials $ 26,000 Direct labor 28,000 Variable manufacturing overhead 20,000 Fixed manufacturing overhead 45,000 Total costs $ 119,000 An outside supplier has offered to provide Part Y at a price of $ 12 per unit. If Lindon stops producing the part internally, one third of the fixed manufacturing overhead would be eliminated. Required: Prepare a make-or-buy analysis showing the annual advantage or disadvantage of accepting the outside supplier ' s offer. Please state clearly whether the part should be made or bought and share your work.
7. Question:( TCO B) Sandler Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below.