Hoanita Industries incurs unit costs of Rp80,000 (Rp50,000 variable and Rp30,000 fixed) in making an assembly part

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Hoanita Industries incurs unit costs of Rp80,000 (Rp50,000 variable and Rp30,000 fixed) in making an assembly part for its finished product. A supplier offers to make 10,000 of the assembly part at Rp60,000 per unit. If the off er is accepted, Hoanita will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Hoanita will realize by buying the part.

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Accounting Principles

ISBN: 978-1119419617

IFRS global edition

Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt

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