The cjp company produces 11800 units of item s10 annually, Ask an Expert

Accounting

The CJP Company produces 11,800 units of item S10 annually at a total cost of $244,000.

Direct materials $ 29,000

Direct labor 73,000

Variable overhead 54,000

Fixed overhead 88,000 Total $ 244,000

The XYZ Company has offered to supply 11,800 units of S10 per year for $27.00 per unit. If CJP accepts the offer, $13.00 per unit of the fixed overhead would be saved. In addition, some of CJP's facilities could be rented to a third party for $24,000 per year. What are the relevant costs for the "make" alternative?

$333,400.

$343,400.

$309,400.

$314,400.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91962480

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