C Production (units) 20,000 40,000 80,000 Direct Material Cost Per unit 0.80 1.00 0.40 Direct Labor Cost Per unit 1.60 1.80 0.80 Direct Overhead Cost Per unit 0.40 0.60 0.20 Fixed cost per unit 0.80...

Elephan Co. produces 3 components with the following information available

C<br>Production (units)<br>20,000<br>40,000<br>80,000<br>Direct Material Cost Per unit<br>0.80<br>1.00<br>0.40<br>Direct Labor Cost Per unit<br>1.60<br>1.80<br>0.80<br>Direct Overhead Cost Per unit<br>0.40<br>0.60<br>0.20<br>Fixed cost per unit<br>0.80<br>1.00<br>0.40<br>Sales Price per unit<br>4.00<br>5.00<br>2.00<br>Imported Price<br>2.75<br>4.20<br>2.00<br>Required:<br>(1) Should Elephant Ears Co. make or buy each of the components it sells?<br>(i) If the components are all made by Elephant Ears Co. how much profit will be<br>made?<br>(ii) If your recommendation in part (i) is taken up how much profit will be made?<br>(iv) What other factors should be considered before this decision is made?<br>

Extracted text: C Production (units) 20,000 40,000 80,000 Direct Material Cost Per unit 0.80 1.00 0.40 Direct Labor Cost Per unit 1.60 1.80 0.80 Direct Overhead Cost Per unit 0.40 0.60 0.20 Fixed cost per unit 0.80 1.00 0.40 Sales Price per unit 4.00 5.00 2.00 Imported Price 2.75 4.20 2.00 Required: (1) Should Elephant Ears Co. make or buy each of the components it sells? (i) If the components are all made by Elephant Ears Co. how much profit will be made? (ii) If your recommendation in part (i) is taken up how much profit will be made? (iv) What other factors should be considered before this decision is made?

Jun 09, 2022

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C Production (units) 20,000 40,000 80,000 Direct Material Cost Per unit 0.80 1.00 0.40 Direct Labor Cost Per unit 1.60 1.80 0.80 Direct Overhead Cost Per unit 0.40 0.60 0.20 Fixed cost per unit 0.80...

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