Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help with the question from the image Mallory Company manufactures widgets. Bowden Company has approached Mallory with a proposal to sell the company widgets

please help with the question from the image

image text in transcribed
Mallory Company manufactures widgets. Bowden Company has approached Mallory with a proposal to sell the company widgets at a price of $82,000 for 100,000 units. Mallory 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 material $ 31,000 Direct labor 29.000 Manufacturing overhead $1,000 Total $100,000 The manufacturing overhead consists of $16,000 of costs that will be eliminated if the components are no longer produced by Mallory. From Mallory's point of View. how much is the incremental cost or savings if the widgets are bought instead of made? 0 A. $2.000 incremental savings 0 B. $18,000 incremental cost 0 C. 518.000 incremental savings 0 D. $6.000 incremental cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Financial And Managerial Accounting The Managerial Chapters

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura

6th Edition

0134486854, 978-0134486857

More Books

Students also viewed these Accounting questions

Question

Behaviour: What am I doing?

Answered: 1 week ago