Gelb Company currently manufactures 54,500 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $69,000 per year, and allocated fixed costs are $69.500 per year The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making and buying 54,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Inc Costs to Make Inc Costs to Buy Calculate the total incremental cost of buying 54,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? (Round cost per unit answer to 2 decimal places.) Incremental Costs to Buy Relevant Amount Relevant Fixed per Unit Costs Total Relevant Costs Purchase price per unit Total incremental cost to buy The component should manufacture or buy from the outside supplier, Calculate the total incremental cost of making and buying 54,500 units. Should it continue to manufacture the component buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Inc Costs to Inc Costs to Make Buy Calculate the total incremental cost of making 54,500 units. (Round "variable cost per unit" answer to 2 decimal places.) Total Relevant Costs Incremental Costs to Make Relevant Amount Relevant per Unit Fixed Costs Variable cost per unit Fixed manufacturing costs Total incremental cost to make Farrow Co. expects to sell 400,000 units of its product in the next period with the following results. $6,000,000 Sales (400.000 units) Costs and expenses Direct materiale Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses Net Income 800,000 1,600,000 400,000 600,000 1,028,000 4.428,000 $1,572,000 The company has an opportunity to sell 40,000 additional units at S13 per unit. The additional sales would not affect its current expected sales. Direct materials and labor costs per unit would be the same for the additional units as they are for the regular units. However, the additional volume would create the following incremental costs: (1) total overhead would increase by 15% and (2) administrative expenses would increase by $172,000, Calculate the combined total net income if the compar)accepts the offer to sell additional units at the reduced price of $13 per unit. Normal Volume Additional Volume Combined Total 0 Costs and expenses: 0 Normal Volume Additional Volume Combined Total 0 Costs and expenses: - 0 d 0 0 0 0 0 Total costs and expenses Incremental income (loss) from new business $ 0 $ olo o $ Should the company accept or reject the offer? The company should reject the offer The company should accept the offer Gelb Company currently manufactures 54,500 units per year of a key component for its manufacturing process. Variable costs are $6.25 per unit, fixed costs related to making this component are $69.000 per year, and allocated fixed costs are $69,500 per year. The allocated fixed costs arc unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.50 per unit. Calculate the total incremental cost of making and buying 54,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by entering your answers in the tabs below. Inc Costs to Inc Costs to Buy Make Calculate the total incremental cost of making 54,500 units. (Round "variable cost per unit answer to 2 decimal places.) Incremental Costs to Make Relevant Amount Relevant Fixed Costs Total Relevant Costs per Unit Variable cost per unit Inc Costs to Make Inc Costs to Buy Calculate the total incremental cost of making 54,500 units. (Round "variable cost per unit" answer to 2 decimal places.) Total Relevant Costs per Unit Incremental Costs to Make Relevant Amount Relevant Fixed Costs Variable cost per unit Fixed manufacturing costs Total incremental cost to make its Inc Costs to Inc Costs to Make Buy 3 04:30:14 Skipped eBook Calculate the total incremental cost of buying 54,500 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? (Round cost per unit answer to 2 decimal places.) Incremental Costs to Buy Relevant Amount Relevant Fixed Total Relovant por Unit Costs Costs Purchase price per unit Total incremental cost to buy The component should manufacture or buy from the outside supplier