The Gilster Company, a machine tooling firm, has several plants. One plant, located in St. Cloud, Minnesota, uses a job order costing system for its batch production processes. The St. Cloud plant has two departments through which most jobs pass. Plant-wide overhead, which includes the plant managers salary, accounting personnel, cafeteria, and human resources, is budgeted at $360,000. During the past year, actual plantwide overhead was $350,000.

Each departments overhead consists primarily of depreciation and other machine-related expenses. Selected budgeted and actual data from the St. Cloud plant for the past year are as follows:

	Department A	Department B
Budgeted Dept overhead (excludes plantwide overhead)	147,000	442,000
Actual Dept Overhead	155,000	462,000
Expected Tool Activity:
Direct Labor Hours	48,000	25,000
Machine Hours	14,000	52,000
Actual Activity:
Direct Labor Hours	49,000	23,800
Machine Hours	14,800	54,000

For the coming year, the accountants at the St. Cloud plant are in the process of helping the sales force create bids for several jobs. Projected data pertaining only to job no. 110 are as follows

Direct Materials $21,200

Direct Labor Cost:

Dept A (3000 hours) $45,000

Dept B (1,100 hours) $11,200

Machine hours projected:

Dept A: 220

Dept B: 1,200

Units produced: 14,000

Would your response to part e change if the St. Cloud plant could use the facilities necessary to produce parts for job no. 110 for another job that could earn an incremental profit of $31,000?

Incremental profit earned by producing the other job?

Incremental cost of buying the parts from the subcontractor?

**Answer to part E=Continue to make the part yourself