Gregg Cоrpоrаtiоn mаkes 70,000 units per yeаr of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 17.80 Direct labor 19.00 Variable manufacturing overhead 1.00 Fixed manufacturing overhead 17.10 Unit product cost $ 54.90 An outside supplier has offered to sell the company all of these parts it needs for $48.50 a unit. If Gregg 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 $273,000 per year. If the part were purchased from the outside supplier, all of the variable costs of the part would be avoided. However, $8.20 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 $54.90 is relevant in the decision of whether to make or buy the part? (Round your intermediate calculations to 2 decimal places.)
Recycle аnd Renew Cоrpоrаtiоn is а shipping container refurbishment company that measures its output by the number of containers refurbished. Recycle and Renew has provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results of operations for May. Fixed Element per Month Variable Element per Container Refurbished Actual Total for May Revenue $3,800 $123,400 Employee salaries and wages $40,000 $1,100 $ 73,800 Refurbishing materials $ 700 $ 21,800 Other expenses $29,700 $ 28,800 When the company prepared its planning budget at the beginning of May, it assumed that 37 containers would have been refurbished. However, 32 containers were actually refurbished during May. The revenue variance in the Revenue and Spending Variances column of a report comparing actual results to the flexible budget for May would have been closest to: