Question
Deutsche Bank manufactures 20,000 ATM machines annually. The cost per ATM machine is: Direct materials: 150 Direct labor: 100 Variable manufacturing overhead: 60 Fixed manufacturing
Deutsche Bank manufactures 20,000 ATM machines annually. The cost per ATM machine is:
- Direct materials: €150
- Direct labor: €100
- Variable manufacturing overhead: €60
- Fixed manufacturing overhead: €40
Commerzbank offers to sell 20,000 ATM machines at €320 each. Accepting the offer will save Deutsche Bank €80,000 in fixed overhead.
- Conduct a differential analysis to decide if Deutsche Bank should make or buy the ATM machines.
- Calculate the total cost savings or additional costs if the offer is accepted.
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Accounting Information Systems
Authors: Marshall B. Romney, Paul J. Steinbart
12th edition
132552620, 978-0132552622
