Oriole Company must decide whether to make or buy some of its components. The costs of producing 63,800 switches for its generators are as follows. Direct materials Direct labor (a) $29.100 $40,462 Instead of making the switches at an average cost of $2.99 ($190,762 +63,800), the company has an opportunity to buy the switches at $2.70 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. Direct materials Direct labor Variable overhead Fixed overhead 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 eg.-45 or parentheses eg. (45)) Variable manufacturing costs $44,800 $76,400 Make $ Buy Net Income Increase (Decrease)
Oriole Company must decide whether to make or buy some of its components. The costs of producing 63,800 switches for its generators are as follows. Direct materials Direct labor (a) $29.100 $40,462 Instead of making the switches at an average cost of $2.99 ($190,762 +63,800), the company has an opportunity to buy the switches at $2.70 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. Direct materials Direct labor Variable overhead Fixed overhead 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 eg.-45 or parentheses eg. (45)) Variable manufacturing costs $44,800 $76,400 Make $ Buy Net Income Increase (Decrease)
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 7EB: Oat Treats manufactures various types of cereal bars featuring oats. Simmons Cereal Company has...
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