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Sweet Acacia Company must decide whether to make or buy some of its components. The costs of producing 60,800 switches for its generators are as
Sweet Acacia Company must decide whether to make or buy some of its components. The costs of producing 60,800 switches for its generators are as follows. Direct materials $29,184 Variable overhead $51,680 Direct labour 43,168 Fixed overhead 62,016 Instead of making the switches at an average cost of $3.06 ($186,048 : 60,800), the company has an opportunity to buy the switches at $2.86 per unit. If the company purchases the switches, all the variable costs and one-third of the fixed costs will be eliminated. (a) Prepare an incremental analysis showing whether the company should make or buy the switches. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Per Unit Make Number of units: $Prepare an incremental analysis showing whether the company should make or but.r the switches. {Round per unit answers to 2 decimal pl'oces. es. 1 5.25. if an amount reduces the net income then enter with a negative sign preceding the number eg. 45.000 or parenthesis, e3 {15,0001} Per Unit Make Number of units: Purchase price Variable manufacturing costs Cost of good sold Fixed manufacturing costs Total annual cost Manufacturing overhead The company should v the components. Per Unit Make Number of units: $ The company should the components. make buy eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer(a) Prepare an incremental analysis showing whether the company should make or buy the switches. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Net Income Increase Per Unit Make Buy (Decrease) $ LA $ The company should V the components
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