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Tex's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials .... $60,000 Direct Labor ........ 10,000 Variable
Tex's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials .... $60,000 Direct Labor ........ 10,000 Variable Overhead ... 30,000 Fixed Overhead ..... 20,000 If Tex's Manufacturing Company can purchase the component externally for $110,000 and only $5,000 of the fixed costs can be avoided, what is the correct make-or-buy decision? O Buy and save $15,000 O Buy and save $5,000 Make and save $15,000 Make and save $5,000 A segment has the following data: Sales .... $350,000 Variable expenses.. 150,000 Fixed expenses 275,000 What will be the incremental effect on net income if this segment is eliminated, assuming the fixed expenses will be allocated to the remaining profitable segments? $200,000 increase $200,000 decrease $275,000 decrease O $400,000 increase The process of evaluating financial data that change under alternative courses of action is called double entry analysis. contribution margin analysis. incremental analysis. cost-benefit analysis. Incremental analysis would be appropriate for acceptance of an order at a special price. a retain or replace equipment decision. a sell or process further decision. all of these answers are correct
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