Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,000 remotes is as follows: Cost Direct materials $ 65,000 Direct labor $ 55,000 Variable overhead $ 30,eee Fixed overhead $ 50,000 Total $ 200,000 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 $20,000 of the fixed costs can be avoided. What is the 3. What is the change in net income if fixed cost of $20,000 can be avoided and Frannie could rent out the factory space no longer in use for $20,000? 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 Required Required 2 > 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 Required 2 > increase decrease Cost Direct materials $ 65,000 Direct labor $ 55,000 Variable overhead $ 30,000 Fixed overhead $ 50,000 Total $ 200,000 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 $20,000 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 $20,000 can be avoided and Frannie could rent out the factory space no longer in use for $20,000? 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 $20,000 of the fixed costs can be avoided. What is the change in net income? per unit Difference in cost Change in net income Cost Direct materials $ 65,000 Direct labor $ 55, eee Variable overhead $ 30,000 Fixed overhead $ 50,000 Total $ 280,000 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 $20,000 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 $20,000 can be avoided and Frannie could rent out the factory space no longer in use for $20,000? 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 $20,000 can be avoided and Frannie could rent out the factory space no longer in use for $20,000? Change in net income
