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Colden Enterprises manufactures one of the components used to assemble its main company product Specialty Products, Inc. has offered to make the component at a
Colden Enterprises manufactures one of the components used to assemble its main company product Specialty Products, Inc. has offered to make the component at a cost of $13 20 per unit Colden Enterprises curtent cost is $13.00 per unit of the component based on the 125.000 components that Colden Enterprises currently produces Read the requirements This current cost per unit is based on the followin (Click the con to view the information None of Colden Enterprises tied costs will be be used to build a new product This the produce Requirement 1. Golden Enterprises outsources the manufacturing of the component will operating income increase or decrono? Hy how much? (Enhora o Rotany zeto balance make exceeds the cost to buy) Incremental Analysis Make Outsource Data table Outsourcing Decision Component Component Difference Variable costs Plus Fixed costs Direct material per unit Total cost of 125 000 components Direct labor per unit Less Profit from another product Variable manufacturing overhead per unit Fixed manufacturing overhead per unit Netcost Total manufacturing costs per unit Print Done Hucts, Inc the This current cost per unit is based on the following calculations: (Click the icon to view the information) None of Colden Enterprises' fixed costs will be eliminated if the component is outsourced. However, the freed capacity could be used to build a new product. This new product would be expected to generate $29,000 of contribution margin per year. e or decrease? By how much? (Enter a "0" for any zero balances. Use a minus sign or parenthoses in the Difference column when the cost to Data table 4.00 6.75 Direct material per unit. $ Direct labor per unit Variable manufacturing overhead per unit.. Fixed manufacturing overhead per unit Total manufacturing costs per unit... 0.50 1.75 13.00 Print Done
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