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 10,160 remotes is as follows: Cost Direct materials Direct labor Variable overhead Fixed overhead Total $ 66,040 $ 55,880 $ 30, 480 $ 50,800 $ 203, 200 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 $20,320 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 $20,320 can be avoided and Frannie could rent out the factory space no longer in use for $20,320? Complete this question by entering your answers in the tabs below. Required 1 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? per unit Difference in cost Change in net income 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 10,160 remotes is as follows: Cost Direct materials Direct labor Variable overhead Fixed overhead Total $ 66,040 $ 55,880 $ 30,480 $ 50,800 $ 203,200 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 $20,320 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 $20,320 can be avoided and Frannie could rent out the factory space no longer in use for $20,320? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the difference in cost between making and buying the remotes if $20,320 of the fixed costs can be avoided. What is the change in net income? Difference in cost per unit Change in net income 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 10,160 remotes is as follows: Cost Direct materials Direct labor Variable overhead Fixed overhead Total $ 66,040 $ 55,880 $ 30,480 $ 50,800 $ 203, 200 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 $20,320 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 $20,320 can be avoided and Frannie could rent out the factory space no longer in use for $20,320? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 What is the change in net income if fixed cost of $20,320 can be avoided and Frannie could rent out the factory space no longer in use for $20,320? Change in net income
