Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

b) Corrie Enterprise manufactured 6,000 units of a component part that is used in its product and incurred the following costs: Direct materials RM35,000 Direct

image text in transcribed
b) Corrie Enterprise manufactured 6,000 units of a component part that is used in its product and incurred the following costs: Direct materials RM35,000 Direct labour 15,000 Variable manufacturing overhead 10,000 Fixed manufacturing overhead 20,000 RM80,000 Another company has offered to sell the same component part to the company for RM13 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the component part was purchased from the outside firm. If the component part is purchased from the outside firm, Corrie Enterprise has the opportunity to use the factory equipment to produce another product which is estimated to have a contribution margin of RM22,000. Required: Prepare an incremental analysis report for Corrie Enterprise and comment on whether Corrie Enterprise should make or buy the component part. (10 marks) [TOTAL: 20 MARKS] Continued

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting For Executives And MBAs

Authors: Paul Simko, James Wallace, Joseph Comprix

5th Edition

1618533665, 9781618533661

More Books

Students also viewed these Accounting questions