Sandhill Company manufactured 7,200 units of a component part that is used in its product and incurred the following costs:

Direct materials		$42,000
Direct labor		18,000
Variable manufacturing overhead		12,000
Fixed manufacturing overhead		24,000
		$96,000

Another company has offered to sell the same component part to the company for $13 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the component part was purchased from the outside firm. If the component part is purchased from the outside firm, Sandhill Company has the opportunity to use the factory equipment to produce another product which is estimated to have a contribution margin of $26,400. Prepare an incremental analysis report for Sandhill Company which can serve as informational input into this make or buy decision.

View Policies Current Attempt in Progress Sandhill Company manufactured 7,200 units of a component part that is used in its product and incurred the following costs: Direct materials $42.000 18,000 Direct labor Variable manufacturing overhead Fixed manufacturing overhead 12,000 24,000 $96,000 Another company has offered to sell the same component part to the company for $13 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the component part was purchased from the outside firm. If the component part is purchased from the outside firm, Sandhill Company has the opportunity to use the factory equipment to produce another product which is estimated to have a contribution margin of $26,400. Prepare an incremental analysis report for Sandhill Company which can serve as informational input into this make or buy decision. (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses e.g. (45). Do not leave any field blank. Entero for the amounts.) Make Buy Increase (Decrease) $ $ $ $