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Coronado Company manufactures widgets. Wildhorse Company has approached Coronado with a proposal to sell the company widgets at a price of $59800 for 100,000 units.
Coronado Company manufactures widgets. Wildhorse Company has approached Coronado with a proposal to sell the company widgets at a price of $59800 for 100,000 units. Coronado is currently making these components in its own factory. The following costs are associated with this part of the process when 100,000 units are produced: Direct material $23300 Direct labour 22700 Manufacturing overhead 29600 Total $75600 The manufacturing overhead consists of $11000 of costs that will be eliminated if the components are no longer produced by Coronado. From Coronado's point of view, how much is the incremental cost or savings if the widgets are bought instead of made? $2800 incremental savings O $2800 incremental cost O $15800 incremental savings O $15800 incremental cost
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