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Buddy Pets has recently started to manufacture talking toy pets The cost structure to manufacture 10,000 of these toy pets is as follows. Direct materials
Buddy Pets has recently started to manufacture talking toy pets The cost structure to manufacture 10,000 of these toy pets is as follows. Direct materials ($30 per pet) $300,000 Direct labour ($25 per pet) 250.000 Variable overhead ($8 per pet) 80,000 Allocated fred overhead ($20 per pet) 200.000 Total $830,000 Buddy Pets is approached by Maxum Inc. which offers to make the toy pets for 573 per unit. Usine incremental analysis, determine whether Buddy Pets should accept this offer under each of the following independent assumptions: Prepare an incremental analysis. Assume that $90,000 of the fixed overhead cost in making 10.000 of the toy pets) is avoidable. (Enter savings with a negative sign preceding the number es. -15,000 or parenthesis, cs. (15,0001) Cost Make Buy Cost (Savine) S Total annual cost
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