Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Cullumber Company must decide whether to make or buy some of its components. The costs of producing 69,800 switches for its generators are as follows.
Cullumber Company must decide whether to make or buy some of its components. The costs of producing 69,800 switches for its generators are as follows. Direct materials $29,700 Variable overhead $45,400 Direct labor $51,806 Fixed overhead $80,400 Instead of making the switches at an average cost of $2.97 ($207,306 + 69,800), the company has an opportunity to buy the switches at $2.74 per unit. If the company purchases the variable costs and one-fourth of the fixed costs will be eliminated. Your answer is partially correct. Try again. Prepare an incremental analysis showing whether the company should make or buy the switches. (Enter negative amounts using either a negative sin preceding the number parentheses e.g. 45).) Net Income Increase (Decrease) 1 a Direct materials 29700 29700 Direct labor 51806 Variable manufacturing costs Fixed manufacturing costs Purchase price Total cost 2073067 of additional costs ir buys Cullumber Company will incur the switches CALCULATOR PRINTER VERSION NEXT Total cost Cullumber Company will incur $ of additional costs ir buys the switches Your answer is partially correct. Try again. Would your answer be different if the released productive capacity will generate additiona e.g.-45 or parentheses e.g. (45).) Net Income Increase (Decrease Total Cost Opportunity cost Total cost increased by M . The analysis shows that net income will
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started