Question
LaSalle Manufacturing currently makes part C-430 as follows: Units manufactured: 4,100 Costs to manufacture each part: Direct Materials Direct Labor Variable Overhead Fixed Overhead (allocated)
LaSalle Manufacturing currently makes part C-430 as follows: Units manufactured: 4,100 Costs to manufacture each part: Direct Materials Direct Labor Variable Overhead Fixed Overhead (allocated) $ 7.42 $2.38 $ 1.75 $ 3.00 $14.55 Total cost per part Jasper Corporation has approached LaSalle with an offer to manufacture part C-430 at a cost of $12.00/unit. If LaSalle purchases the part externally, the allocated fixed overhead would not be eliminated, it would be allocated to other products. Required: Answer the following question. Show your work and clearly label your final answers. No calculations = No credit. If you are solving the problem on paper, in Excel, etc., you have the option to upload your answer at the bottom of the exam rather than retype it into the box; saving time! DO NOT DO BOTH! 1) How much would operating income increase or decrease if LaSalle decides to outsource production of part C-430 to Jasper
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