contestada

Manson Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 10,000 of the assembly part at $6 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Respuesta :

Answer:

The preparation is shown below:

Explanation:

The preparation is presented below

Particulars              Make     Buy             Net Income Increase

                                                                           or (Decrease)

Variable

Manufacturing

Cost (10,000 × $5) $50,000                    $50,000    

Fixed

Manufacturing

Cost (10,000 × $3) $30,000     $30,000      No effect                                                            

Purchase Price

(10,000 × $6)          -               $60,000      -$60,000                                                

Total Annual Cost $80,000     $90,000    -$10,000

As we can see that the total annual cost is less in make decision as compared to buy decision so the Manson should make the part      

Otras preguntas