Question Help Savoy Enterprises manufactures one of the components used to be its main company This current cost per unit isased on the following calculations product Specialty Products, Inc., has offered to make the component at a cost of $13.10 per mick the icon to view the information) unit Savoy Enterprises current cost is $1475 per unit of the component based on the 110,000 components that Savoy Enterprises currently produces None of Savoy Enterprise found costs will be eliminated the component is outsourced. Read the requirements However, the freed city could be used to build a new product. This product would be uspected to generale $33,000 of contribution margin per year Requirement 1.11 Savoy pries outsources the manufacturing of the component, wil operating income nese or decrease? By how much? (or a "" for any walce. Uwe minus sign or parentheses in the Difference column when the cost to make the cost to buy) Make Component Outsource Component Difference Incremental Analysis Outsourcing Decision Variable costs Plus Fived costs Total cost of 110,000 components Less Profit from another product Nat cost th en - X Requirements lak apd 1. If Savoy Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? 2. What is the maximum price per unit Savoy Enterprises would be willing to pay if it outsources the component? Print Done However, the freed capacity could be us expected to generate $33.000 of contribu Data Table By how acty to 1 $ 6.00 Direct material per unit Direct labor per unit 6.75 Variable manufacturing overhead per unit 0.75 1.25 Fixed manufacturing overhead per unit $ 14.75" Total manufacturing costs per unit Print Done E8-29A (similar to) Savoy Enterprises manufactures one of the components used to assemble its main company product. Specialty Products, Inc., has offered to make the component at a cost of $13.10 per unit. Savoy Enterprises' current cost is $14.75 per unit of the component, based on the 110,000 components that Savoy Enterprises currently produces. Read the requirements Difference Requirement 1. If Savoy Enterprises outsources the manufacturing of the component, will operating in or parentheses in the Difference column when the cost to make exceeds the cost to buy.) Incremental Analysis Make Outsource Outsourcing Decision Component Component Variable costs Plus: Fixed costs Total cost of 110,000 components Less. Profit from another product Net cost Enter any number in the edit fields and then click Check Answer 3 parts remaining Clear All 15 tv Question Help This current cost per unit is based on the following calculations: B (Click the icon to view the information.) None of Savoy Enterprises' fixed costs will be eliminated if the component is outsourced. However, the freed capacity could be used to build a new product. This new product would be expected to generate $33,000 of contribution margin per year. ng income increase or decrease? By how much? (Enter a "0" for any zero balances. Use a minus sign Requirement 1. If Savoy Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? (Enm or parentheses in the Difference column when the cost to make exceeds the cost to buy.) Incremental Analysis Make Outsource Outsourcing Decision Component Component Difference Variable costs Plus: Fixed costs Total cost of 110.000 components Less: Profit from another product Nel cost s used to assemble its main company me component at a cost of $13.10 per unit. e component, based on the 110,000 (Click the icon to view the information.) None of Savoy Enterprises' fixed costs will be the freed capacity could be used to build a new generate $33.000 of contribution margin per ye Data Table how much? (E manufacturing I to make es 6.00 ent Direct material per unit Direct labor per unit Variable manufacturing overhead per unit 6.75 0.75 1.25 Fixed manufacturing overhead per unit $ 14.75 Total manufacturing costs per unit Print Done k Check Answer. Clear All (ee 07. ltv A me component, based on the 110,000 S. None of Savoy Enterprises' fixed costs will be the freed capacity could be used to build a ne generate $33,000 of contribution margin per y i Requirements e ang 1. If Savoy Enterprises outsources the manufacturing of the component, will operating income increase or decrease? By how much? 2. What is the maximum price per unit Savoy Enterprises would be willing to pay if it outsources the component? Print Done
