Exercise 10-19

Insert your answers in the gray-shaded cells. If an

answer is incorrect, the word “wrong” will appear.

a.

Relevant cost to manufacture

$         4.80

Relevant cost to buy

            4.00

Difference

x Units required annually

     1,20,000

Advantage to buying

$            –  

b.

Relevant cost to buy:

$         4.00

Avoidable variable cost

          (3.68)

Minimum avoidable fixed cost

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