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Tamarisk Firm is considering whether to outsource the manufacture of subcomponent JXY. The accounting department provides the following cost information for manufacturing 11,800 units of

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Tamarisk Firm is considering whether to outsource the manufacture of subcomponent JXY. The accounting department provides the following cost information for manufacturing 11,800 units of subcomponent JXY per month $41,400 28.900 Direct materials costs Direct labour costs Variable overhead Fixed overhead 15,800 12,700 'Fixed overhead includes $5,300 supervisor's salary. International Firm agrees to supply Tamarisk with 11,800 units per month for a total cost of $145,700. If subcomponent JXY is outsourced, Tamarisk will be able to increase the production and sales of its final product by 1,060 units per month the product is sold for $120 per unit and its average variable costs per unit are $75. The supervisor's salary will be eliminated if subcomponent JXY is outsourced. Prepare an incremental analysis for subcomponent JXY. (If an amount reduces the incremental casts then enter with a negative sign preceding the number e.g.-15,000 or parenthesis, eg. (15,000). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) Incremental Costs (Savings) Make Buy $ Total monthly cost Opportunity cost Purchase price Fixed overhead Cost of good soldManufacturing overhead Variable overhead Direct labour Direct materials Cost of good sold Manufacturing overhead $ $

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