Sure. Here it is (I can follow the first 2 paragraphs, but the 3rd is stumping me):
C – The product should be produced if the incremental cost to produce the product, including any opportunity cost of idle facilities, is less than the purchase price.
Since the fixed plant charge will not change due to this decision, it is irrelevant and should not be considered. The direct materials and direct labor costs ($40,000+ $30,000 = $70,000) are relevant costs. These incremental costs total $70,000/month to make the product, while they can buy the part for $80,000/month, an increase in monthly costs of $10,000.
However, the rental income from renting the idle capacity of $5,000 reduces the monthly cost of purchasing the pars, for a net increase in monthly income before taxes of $5,000.
Exam:I'm done 🙂 🙂 🙂
REG - 71 (2/22/14); 67 (4/3/14); 74 (8/29/15); 83 (2/29/16)!!!
BEC - 72 (5/24/14); 85 (1/3/15)!!!!
AUD - 72 (8/23/14); 76 (10/15/14)!!!
FAR - 77 (5/26/15)!!!
Started in 2013 using Kaplan and failed REG, REG, BEC, AUD. Switched to NINJA suite in Sept 2014 and passed AUD...then BEC...then FAR!
REG took 2 tries but I finally got it in too!
I'm a hard convert - Using NINJA method with NINJA video/book/notes/MCQ
Education: Check
Experience: 3 months left! I hit 4 years on May 30 🙂