Question: Current Attempt in Progress Pharoah Firm is considering whether to outsource the manufacture of subcomponent JXY. The accounting department provides the following cost information for

 Current Attempt in Progress Pharoah Firm is considering whether to outsource
the manufacture of subcomponent JXY. The accounting department provides the following cost

Current Attempt in Progress Pharoah Firm is considering whether to outsource the manufacture of subcomponent JXY. The accounting department provides the following cost information for manufacturing 11,600 units of subcomponent JXY per month. -Fixed overhead includes $4,400 supervisor's salary. International Firm agrees to supply Pharoah with 11,600 units per month for a total cost of $112,300. If subcomponent JXY is outsourced, Pharoah will be able to increase the production and sales of its final product by 1,040 units per month; the product is sold for $100 per unit and its average variable costs per unit are $85. The supervisor's salary will be eliminated if subcomponent JXY is outsourced. Prepare an incremental analysis for subcomponent JXY. (If an amount reduces the incremental costs then enter with a negative sign preceding the number eg, 15,000 or parenthesis, eg. (15,000). While alternate opproaches are possible, irrelevant fixed costs should be included in both options when solving this problem.)

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