Ch07 adj Werner Jones Mgt Acctg PP97 2003

Assume that microbake could assume reduce fixed costs

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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,...
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This note was uploaded on 03/16/2014 for the course ACC 212 taught by Professor Quintanna during the Spring '08 term at University of Miami.

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