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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.
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