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Salley Company Makes Pagers

Question 170

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Salley Company makes pagers. Currently, Salley purchases 10,000 plastic housings per year from an outside company for $1 each. One of Salley's engineers suggested that the company make its plastic housings in-house. Estimated unit costs are as follows:
Salley Company makes pagers. Currently, Salley purchases 10,000 plastic housings per year from an outside company for $1 each. One of Salley's engineers suggested that the company make its plastic housings in-house. Estimated unit costs are as follows: * Fixed overhead is $2,400 per year in equipment costs specifically traceable to the plastic housing line and $1,600 per year in general overhead costs to be allocated to this line * Fixed overhead is $2,400 per year in equipment costs specifically traceable to the plastic housing line and $1,600 per year in general overhead costs to be allocated to this line
Salley Company makes pagers. Currently, Salley purchases 10,000 plastic housings per year from an outside company for $1 each. One of Salley's engineers suggested that the company make its plastic housings in-house. Estimated unit costs are as follows: * Fixed overhead is $2,400 per year in equipment costs specifically traceable to the plastic housing line and $1,600 per year in general overhead costs to be allocated to this line

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