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Cans Inc. is considering purchasing component YY instead if producing it in-house. Component YY can be purchased for $207. The following cost information pertains to
Cans Inc. is considering purchasing component YY instead if producing it in-house. Component YY can be purchased for $207. | ||||||||||||||||
The following cost information pertains to the production of component YY. Cans Inc. uses 75,000 compenents per year. | ||||||||||||||||
Direct Materials | $100.80 | |||||||||||||||
Direct Labor (10 minutes per part) | ||||||||||||||||
($18 per hour) | $3 | |||||||||||||||
Variable OH | $4.60 | |||||||||||||||
Fixed OH | $234,000 | |||||||||||||||
Depreciation | $32,420 | |||||||||||||||
Prepare an incremental analysis to determine if component YY should continue to be produced in-house or purchased from an outside vendor. | ||||||||||||||||
Make | Buy | Difference | ||||||||||||||
Direct Materials | 0 | |||||||||||||||
Direct Labor | 0 | |||||||||||||||
VOH | 0 | |||||||||||||||
Purchase Price | 0 | |||||||||||||||
Total Cost | $ - | $ - | $
- |
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