brebun4742
25.05.2021 •
Business
Guy Fieri Co. is considering whether to continue to make high-end spatulas or buy them from an outside supplier. The company currently produces 10,000 spatulas a year. The unit production cost of the spatulas is as follows: Direct Materials $6.50 Direct Labor $8.30 Variable MOH $4.00 Depreciation of Special Equipment $5.00 Supervisor's Salary $3.60 Allocated General Overhead $2.00 Total $29.40 If Guy Fieri Co. purchases the spatulas from an outside supplier, the supervisor's salary and all variable costs can be avoided. The special equipment can only be used to make spatulas and has no salvage value. If 44% of allocated general overhead can be avoided if Guy Fieri Co. purchases spatulas for an outside supplier, what is the total relevant manufacturing cost per year at 10,000 spatulas produced
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