Crane Company produces Optimist sailboats. The costs of producing 104000 tiller extensions for use in the...

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Crane Company produces Optimist sailboats. The costs of producing 104000 tiller extensions for use in the sailboats are as follows: Direct labor Direct materials Variable overhead Fixed overhead $260000 312000 67600 192400 An outside supplier has offered to supply the tiller extensions for $748800. If Crane accepts the offer $88400 of fixed costs can be avoided. What is the financial advantage (disadvantage) of accepting the supplier's offer? Crane Company produces Optimist sailboats. The costs of producing 104000 tiller extensions for use in the sailboats are as follows: Direct labor Direct materials Variable overhead Fixed overhead $260000 312000 67600 192400 An outside supplier has offered to supply the tiller extensions for $748800. If Crane accepts the offer $88400 of fixed costs can be avoided. What is the financial advantage (disadvantage) of accepting the supplier's offer?

Answer rating: 100% (QA)

SOLUTION To determine the financial advantage or disadvantage of accepting the suppliers offer we ne... View the full answer