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Bynum Industries incurs unit costs of $9 ($6 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers
Bynum Industries incurs unit costs of $9 ($6 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 12,100 of the assembly part at $7 per unit. If the offer is accepted, Bynum will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Bynum will realize by buying the part.. Hint: Compare your current option with new option to determine if the decision will increase or decrease net income. Do NOT enter a dollar sign. For example, if you are typing $10,000 as your answer, answer should be typed as 10,000 without any dollar sign. For any negative amounts, enter them using either a negative sign preceding the number such as -50 or parentheses such as (50), If the amount is zero, enter 0. Make or Buy Make Buy tA tA S Variable Manufacturing Costs Fixed Manufacturing Costs Purchase Price Net Income Increase (Decrease) $ $ IA +A +A $ +A
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