o Calculator Total cost of producing 15,000 monitors Unit cost Direct materials $1,830,000 $122 Direct labor 1,035,000 69 Variable factory overhead 540,000 36 Fixed manufacturing overhead 435,000 29 Foxed non-manufacturing overhead 645,000 43 $4,485.000 $299 You are asked to look over the intern's estimate before the information is shared with members of management who will decide to continue to make the monitors or buy them. The company's controller believes that the estimate may be incorrect because it includes costs that are not relevant. If Zee-Drive buys the monitors, the direct labor force currently employed in producing the monitors will be terminated and there would be no termination costs incurred. There are no materials on hand and to commitments to suppliers to purchase materials, seal materials would need to be purchased to make the monitors. Variable overheads are avoidable monitors are bought. Fixed manufacturing overhead costs would be reduced by $49,200, but non-manufacturing costs would remain the same monitors are bought Fill in the differential analysis. Make or Buy Decisions Differential Analysis Report Purchase price of 15,000 monitors Differential cost to make Direct materials Direct labor Overhead Differential income (loss) from making monitors Oh My Al work saved SubArgene for Grading MacBook Air 30 F3 DOO COD 4 RE > m A # 3 $ 4 % 5 & 7 * 8 1 9 A. 6 { E R T Y U O P Make or Buy Decision: Zee-Drive Ltd. is a computer manufacturer. One of the items they make is monitors. Zee-Drive has the opportunity to purchase 15,000 monitors from an outside supplier for $217 per unit. One of the company's cost-accounting interns prepared the following schedule of Zee-Drive's cost to produce 15,000 monitors: Unit cost Total cost of producing 15,000 monitors $1,830,000 1,035,000 Direct materials $122 69 36 Direct labor Variable factory overhead Foed manufacturing overhead Fixed non-manufacturing overhead 29 540,000 435,000 645,000 $4,485,000 $ 299 You are asked to look over the intern's estimate before the information is shared with members of management who will decide to continue to make the monitors or buy them. The company's controller believes that the estimate may be incorrect because it includes costs that are not relevant. If Zee-Drive buys the monitors, the direct labor force currently employed in producing the monitors will be terminated and there would be no termination costs incurred. There are no materials on hand and no commitments to suppliers to purchase materials, so all materials would need to be purchased to make the monitors. Variable overheads are avoidable i monitors are bought. Fixed manufacturing overhead costs would be reduced by $49,200, but non-manufacturing costs would remain the same if monitors are bought Fill in the differential analysis Make or Buy Decisions Differential Analysis Report Purchase price of 15,000 monitors Differential cost to make Direct materials Previous Check My Wor