ACCT 505 help A Guide to career/uophelp.com ACCT 505 help A Guide to career/uophelp.com | Page 6

Utilities $22,356 $22,674
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