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Managerial Accounting please write and show all the steps and tables.. will give thumbs up b) Corrie Enterprise manufactured 6,000 units of a component part
Managerial Accounting please write and show all the steps and tables.. will give thumbs up
b) Corrie Enterprise manufactured 6,000 units of a component part that is used in its product and incurred the following costs: Direct materials RM35,000 Direct labour 15,000 Variable manufacturing overhead 10,000 Fixed manufacturing overhead 20,000 RM80,000 Another company has offered to sell the same component part to the company for RM13 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the component part was purchased from the outside firm. If the component part is purchased from the outside firm, Corrie Enterprise has the opportunity to use the factory equipment to produce another product which is estimated to have a contribution margin of RM22,000. Required: Prepare an incremental analysis report for Corrie Enterprise and comment on whether Corrie Enterprise should make or buy the component partStep by Step Solution
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