Question
NF Co. manufactures widgets . Malt Company has approximately NF with a proposal to sell the company widgets at a price of $125,000 for 100,000
NF Co. manufactures widgets . Malt Company has approximately NF with a proposal to sell the company widgets at a price of $125,000 for 100,000 units . NF is currently making these components in its own factory . The following costs are associated with this part of the process when 100,000 units are produced: Direct materials $46,500 Direct labor 43,500 Manufacturing overhead 60,000 Total $150,000 The manufacturing overhead consists of $24,000 of costs that will be eliminated if the components are no longer produced by NF. From NF's point of view , how much is the incremental cost or savings if the widgets are bought instead of made ?
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