Business, 07.09.2021 01:40 elchapo8362

Larkin, Inc. uses 1,000 units of the component NJF1 every month to manufacture one of its products. The unit costs incurred to manufacture the component are as follows: Direct materials $65 Direct labor 48 Overhead 96 Total $209 Overhead costs include variable material handling costs of $10, which are applied to products on the basis of direct material costs. The remainder of the overhead costs are applied on the basis of direct labor dollars and consist of 50% variable costs and 50% fixed costs. A vendor has offered to supply the NJF1 component at a price of $175 per unit. (a) Should Larkin purchase the component from the outside vendor if its capacity remains idle

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Larkin, Inc. uses 1,000 units of the component NJF1 every month to manufacture one of its products....