es Company makes flanges for its main product of widgets. The cost of making each widget is as follows: Another company has offered to sell to James Company the flanges for a price of $19.00 each. Should James Company buy the flanges from the other company or

es Company makes flanges for its main product of widgets. The cost of making each widget is as follows: Another company has offered to sell to James Company the flanges for a price of $19.00 each. Should James Company buy the flanges from the other company or

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

James Company makes flanges for its main product of widgets. The cost of making each widget is as follows:

Another company has offered to sell to James Company the flanges for a price of $19.00 each. Should James Company buy the flanges from the other company or continue to make the flanges themselves? Show your computations.

$3.60
$10.00
Direct Materials
Direct Labor
$2.40
$9.00
Variable Manufacturing Overhead
Fixed Manufacturing Overhead.
Total Cost Per Unit
$25.00

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