UCLA Farrugia Corporation & Gottshall Inc Accounting Calculations Worksheet PFA for the question and need answer to be answered in a excel/word document an

UCLA Farrugia Corporation & Gottshall Inc Accounting Calculations Worksheet PFA for the question and need answer to be answered in a excel/word document and Provide all supporting calculations to show how you arrived at your numbers according to the requirements. Part C: Relevant Cost/Special Order
Gottshall Inc. makes a range of products. The company’s predetermined overhead rate is $19 per direct
labor-hour, which was calculated using the following budgeted data:
Variable manufacturing overhead …….
Fixed manufacturing overhead …………
Direct labor-hours…………………………..
$225,000
$630,000
45,000
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 …………………………………..
Direct labor …………………………………………
Manufacturing overhead applied ……………
Unit product cost …………………………………
$21.00
40.80
32.30
$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?
Part C: Relevant Cost/Special Order
Gottshall Inc. makes a range of products. The company’s predetermined overhead rate is $19 per direct
labor-hour, which was calculated using the following budgeted data:
Variable manufacturing overhead …….
Fixed manufacturing overhead …………
Direct labor-hours…………………………..
$225,000
$630,000
45,000
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 …………………………………..
Direct labor …………………………………………
Manufacturing overhead applied ……………
Unit product cost …………………………………
$21.00
40.80
32.30
$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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