[Answered] Contact Us for this Answer +1 323-412-5597 / support@academiagrades.com Answer the question with all supporting calculationsInstructions: Use excel or word only. Provide all supporting calculations to show how you arrived at your numbers Question: Gottshall Inc. makes a range of products. The companys predetermined overhead rate is $19 per direct labor-hour which was calculated using the following budgeted data: Variable manufacturing overhead ……. $225000 Fixed manufacturing overhead ………… $630000 Direct labor-hours ………………………….. 45000 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: Direct materials ………………………………….. $21.00 Direct labor ………………………………………… 40.80 Manufacturing overhead applied …………… 32.30 Unit product cost ………………………………… $94.10 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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