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Old Camp Company manufactures awnings for its own line of tents. The company is currently operating at capacity and has received an offer from one
Old Camp Company manufactures awnings for its own line of tents. The company is currently operating at capacity and has received an offer from one of its suppliers to make the 10,000 awnings it needs for $21 each. Old Camp's costs to make the awning are $10 in direct materials and S5 in direct labor. Variable manufacturing overhead is 80 percent of direct labor. If Old Camp accepts the offer, $35,000 of fixed manufacturing Required: 1. Complete the incremental analysis for the decision to make or buy the awnings in the table provided below Make Buy Increase Direct Materials Direct Labor Variable OH Fixed OH Purchase Price Total
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