Problem 8-24 (Part Level Submission) Carla Vista Water Co. is a leading producer

Question

Problem 8-24 (Part Level Submission) Carla Vista Water Co. is a leading producer of greenhouse irrigation systems. Currently, the company manufactures the timer unit used in each of its systems. Based on an annual production of 40,250 timers, the company has calculated the following unit costs. Direct fixed costs indlude supervisory and clerical salaries and equipment depreciation Direct materials Direct labor Variable manufacturing overhead Direct fixed manufacturing overhead Allocated fixed manufacturing overhead $13 9(30% salaries, 70% depreciation) 9 Total unit cost $41 Clifton Clocks has offered will be laid off to provide the timer units to Caria Vista at a price of $33 per unit. If Carla Vista accepts the offer, the t timer unit supervisory and clerical staff (a1) Calculate the total relevant cost to make or buy the timer units. (Round answers to o decimal swn@dectalplesasa Make Buy Total relevant cost TO VIDEO Attempts: O of 15 used SAVE FOR LATER SUBHET ANSWER 4.24.5 All Rights A Division of MacBook Ai

Explanation / Answer

Calculate relevant cost :

Make Buy Direct material (40250*13) 523250 Direct labour (40250*6) 241500 Variable overhead (40250*4) 161000 Fixed overhead (40250*9*30%) 108675 Purchase price (40250*33) 1328250 Total relevant cost 1034425 1328250

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