Aholt Company Makes 40,000 Units Per Year of a Part

question 108

Multiple Choice

Aholt Company makes 40,000 units per year of a part that it uses in the products it manufactures. The unit product cost of this part is computed as follows:

$\begin{array}{|l|r|}\hline \text { Direct Materials } & \$ 11.30 \\\hline \text { Direct Labour } & \$ 22.70 \\\hline \text { Variable Manufacturing Overhead } & \$ 1.20 \\\hline \text { Fixed Manufactiong Overhead } & \$ 24.70 \\\hline \text { Unit Product Cost } & \$ 59.90\\\hline \end{array}$ An outside supplier has offered to sell the company all the parts that Aholt needs for $46.20 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $264,000 per year.

If the part were purchased from the outside supplier, all direct labour cost of the part would be avoided. However, $21.90 of the fixed manufacturing overhead cost being applied to the part would continue, even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products.

-How much of the unit product cost of $59.90 is relevant in the decision of whether to make or buy the part?

• A) $22.70.
• B) $35.20.
• C) $38.00.
• D) $59.90.

Describe therapeutic patient teaching for sleep disturbances.

Recognize the stages of sleep and their characteristics.

Identify factors affecting sleep quality and strategies to enhance it.

Explore the relationship between lifestyle changes and sleep patterns.

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Definitions:

Persuasive Request

A communication strategy aimed at convincing the recipient to agree with or act upon a requester's proposition.

Original Approach

A novel or unique method or strategy for addressing a problem or conducting a study.

Persuasive Request

A communication strategy designed to influence or convince others to take a specific action or adopt a particular viewpoint.

Favor

An act of kindness beyond what is due or usual.