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Sandhill Company must decide whether to make or buy some of its components. The costs of producing $62,500$ switches for its

generators are as follows.

Instead of making the switches at an average cost of $$2\mathrm{.}95($ $$184,37562,500),$ the company has an opportunity to buy the switches

at $$2\mathrm{.}67$ per unit. If the company purchases the switches, all the variable costs and one$-$fourth of the fixed costs will be eliminated.

$($a$)$

Correct Answer

Your answer is correct.

Prepare an incremental analysis showing whether the company should make or buy the switches. $($Enter negative amounts using

either a negative sign preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).)$

Wilma Company will incur $

of additional costs if it

the switches.

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Solution

Attempts: $1$ of $1$ used

$($b$)$

Would your answer be different if the released productive capacity will generate additional income of $$45,740?($Enter negative

amounts using either a negative sign preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).)($b$)$

Would your answer be different if the released productive capacity will generate additional

income of $$45,740?($Enter negative amounts using either a negative sign preceding the number e$.$g$.-45$

or parentheses e$.$g$.(45).)$