Gottshall Inc

question 50

Essay

Gottshall Inc.makes a range of products.The company's predetermined overhead rate is $19 per direct labor-hour, which was calculated using the following budgeted data: Component P0 is used in one of the company's products.The unit cost of the component according to the company's cost accounting system is determined as follows: An outside supplier has offered to supply component P0 for $78 each.The outside supplier is known for quality and reliability.Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by this decision.Gottshall chronically has idle capacity.

Required:
Is the offer from the outside supplier financially attractive? Why?

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Definitions:

Political Communications

The process and methods used by politicians, political institutions, and organizations to convey messages and information to the public and influence political discourse.

Campaign-Based Process

A structured approach to achieving specific goals, often used in marketing and political campaigns, through a series of coordinated activities.

Voter-To-Candidate

The dynamic or interaction between electoral voters and the candidates they may choose to support or elect.

Public Affairs Officer

An individual responsible for managing an organization’s public image, communications, and relations with the media and public.