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Parks Corporation currently manufactures 3,000 staplers annually for its main product. The costs per stapler are as follows: Direct materials $3 Direct labor 7 Variable
Parks Corporation currently manufactures 3,000 staplers annually for its main product. The costs per stapler are as follows: Direct materials $3 Direct labor 7 Variable overhead 4 Fixed overhead Total 7 $21 Gallup Company has contacted Parks with an offer to sell it 3,000 staplers for $18 each. $5 of the fixed overhead per unit is unavoidable. Prepare an incremental analysis for the make-or-buy decision. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) Incremental savings on direct materials Incremental savings on direct labor incremental savings on variable manufacturing overhead Incremental savings on fixed manufacturing overhead Incremental net cost to buy Incremental net cost to buy Calc, Inc. owns a machine that produces baskets for the gift packages the company sells. The company uses 900 baskets in production each month. The costs of making one basket are $4 for direct materials, $3 for variable manufacturing overhead, $2 for direct labor, and $5 for fixed manufacturing overhead. The unit cost is based on the monthly production of 900 baskets. The company determined that 30% of the fixed manufacturing overhead is avoidable. An outside supplier has offered to sell Calc the baskets for $13 each, and can supply all the units it needs. Prepare an incremental analysis to determine if Calc should buy the baskets from the supplier. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) S
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