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Question 14 of 41 < -/3 E Bonita Company manufactures widgets. Sandhill Company has approached Bonita with a proposal to sell the company widgets
Question 14 of 41 < -/3 E Bonita Company manufactures widgets. Sandhill Company has approached Bonita with a proposal to sell the company widgets at a price of $60000 for 100,000 units. Bonita 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 $22600 Direct labour 21700 Manufacturing overhead 30800 Total $75100 The manufacturing overhead consists of $12800 of costs that will be eliminated if the components are no longer produced by Bonita. From Bonita's point of view, how much is the incremental cost or savings if the widgets are bought instead of made? $2900 incremental cost O $15100 incremental cost O $2900 incremental savings O $15100 incremental savings
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