Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question Help Fiber Systems manufactures an optical switch that it uses in its final product. Fiber Systems incurred the following manufacturing costs when it produced

image text in transcribed
Question Help Fiber Systems manufactures an optical switch that it uses in its final product. Fiber Systems incurred the following manufacturing costs when it produced 74,000 units last year (Click the loon to view the manufacturing costs.) Fiber Systems does not yet know how many switches it will need this year, however, another company has offered to sell Fiber Systems the switch for $14.50 per unit. Fiber Systems buys the switch from the outside supplier, the manufacturing facilities that will be de cannot be used for any other purpose, yet none of the found costs are avoidable Read the requirements Requirement 1. Given the same cost structure, should Fiber Systems make or buy the switch? Show your analysis Complete an incremental analysis to show whether Fiber Systems should make or buy the switch (Enter o for any zero amounts. Round amounts to the nearest cont. Use a minus sign or parentheses when the cost to buy exceeds the cost to make) Fiber Systems Data Table Incremental Analysis for Outsourcing Decision Make Buy Unit Unit Difference Direct materials $ 592.000 Variable cost per unit: Direct labor 74,000 Direct materials Variable MOH 148.000 Direct labor 444,000 Food MOH $ 1258,000 Variable overhead Total manufacturing cost for 74.000 units 14.50 Purchase price from outsider 14.50 Print Done Total variable cost per unit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Accounting questions