E7-11 (Algo) Analyzing Make or Buy Decision [LO 7-2, 7-4] Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,180 remotes is as follows: Cost Direct materials $ 66,170 Direct labor $ 55,990 Variable overhead $ 30,540 Fixed overhead Total $ 50,900 $ 203,600 Frannie is approached by Lincoln Company which offers to make the remotes for $18 per unit. Required: 1. Compute the difference in cost between making and buying the remotes if none of the fixed costs can be avoided. What is the change in net income? 2. Compute the difference in cost between making and buying the remotes if $20,360 of the fixed costs can be avoided. What is the change in net income? 3. What is the change in net income if fixed cost of $20,360 can be avoided and Frannie could rent out the factory space no longer in use for $20,360? Complete this question by entering your answers in the tabs below. Required 11 Required 2 Required 3 Compute the difference in cost between making and buying the remotes if none of the fixed costs can be avoided. What is the change in net income? Difference in cost Change in net income per unit Required 2 > Prev 1 of 5 Next >