{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Ch07 adj Werner Jones Mgt Acctg PP97 2003

Assume that microbake could assume reduce fixed costs

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: onsumers of Management Consumers Accounting Information Accounting LO5 Explain the effects of fixed costs and opportunity costs on outsourcing decisions. • Assume that Microbake could Assume reduce fixed costs by $195,000. ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting, 3e Werner/Jones 7 ­ 33 LO5 Relevant Cost Comparison Make Cost to purchase Direct material Direct labor Variable overhead Fixed overhead Total relevant costs Buy $960,000 $400,000 320,000 80,000 195,000 $995,000 $960,000 $35,000 in favor of buying $35,000 buying the oven timers from the outside vendor ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting, 3e Werner/Jones 7 ­ 34 LO5 Relevant Cost Comparison Make Cost to purchase Direct material Direct labor Variable overhead Fixed overhead Total relevant costs Buy $ 960,000 $ 400,000 320,000 80,000 320,000 $1,120,000 125,000 $1,085,000 $35,000 in favor of buying $35,000 buying the oven timers from the outside vendor ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting,...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern