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Direct material cost (bought in parts) $40
Direct material cost : all of the parts currently proposed for the webcam are bespoke parts. However most of these can actually be replaced with standard parts costing 55%less.
However 3 if bespoke parts which currently account for 20% of the estimated direct material cost cannot be replaced although an alternative supplier charging 10% less has been sourced for these parts.
What is the direct material cost per unit in light of new information?
Its a bit of confusion this question about the replaced part and not replaced part. Im not understanding. Pls explain sir
The bespoke parts currently cost 20% x $40 = $8 and will be replaced and so will cost $8 less 10%.
The other parts currently cost 80% x $40 = $32 and will be replaced and so will cost 55% less.