Question
Parks Corporation currently manufactures 2,500 staplers annually for its main product. The costs per stapler are as follows $2.00 Direct materials $5.00 Direct labor $3.00
Parks Corporation currently manufactures 2,500 staplers annually for its main product. The costs per stapler are as follows $2.00 Direct materials $5.00 Direct labor $3.00 Variable overhead $9.00 Fixed overhead $19.00 Total Gallup Company has contacted Parks with an offer to sell it 2,500 staplers for $15.00 each. $2 of the fixed overhead. per unit is unavoidable Instructions In the table below, prepare an incremental analysis for the make-or-buy decision TABLE: COST CALCULATIONS FOR 2,500 UNITS OF STAPLER INCREMENTAL NET INCOME BUY MAKE Direct materials Direct Labor Variable overhead Fixed overhead Purchase cost Total Cost ?What should be the decision of the company's management? MAKE or BUY
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started