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I am stuck and cannot figure out the end.. how do I get the opportunity cost? Thank you for the help! Question 7 Wilma Company
I am stuck and cannot figure out the end.. how do I get the opportunity cost?
Thank you for the help!
Question 7 Wilma Company must decide whether to make or buy some of its components. The costs of producing 62,600 switches for its generators are as follows Direct materias $30,200 Variable overhead $44,900 Direct labor $31,844 Fixed overhead 77,200 $2.94 $184 044 62,600 the company has an opportunity to buy the switches at $2.73 per unit If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be Instead of making the switches at an average cost o ellminated Prepare an incremental analysis showing whether the company should buy the switches. (Enter negative amounts using either a negative sign preceding the number e.g -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Buy Direct materials Direct labor Variable manufacturing costs Fixed manufacturing costs Purchase price Total cost 30,200 s 1,844 44,800 77,200 30,2 1,844 57900 170898 228798 1930 170898 44754 84044S Wilma Cormpany will incur $ 44754 of additional costs ifi buys the switches. Would your answer be different if the released productive capacity will generate additional income of $49,014 (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45)) Net Income Increase (Decrease) Make Buy Total Cost Opportunity cost Total cost 044 s 228798s , the answer s. The analysis shows that net income will be Question Attempts: 0 of 3 used SAVE FOR LATER SUBHITStep by Step Solution
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