Question: E 7 - 1 1 ( Algo ) Analyzing Make or Buy Decision [ LO 7 - 2 , 7 - 4 ] Frannle Fans

E7-11(Algo) Analyzing Make or Buy Decision [LO 7-2,7-4]
Frannle Fans currently manufactures celling fans that Include remotes to operate them. The current cost to manufacture 10,020 remotes Is as follows:
Frannle is approached by Lincoln Company, which offers to make the remotes for \(\$ 18\) per unit.
Required:
1. Compute the difference in cost per unit between making and buying the remotes if none of the fixed costs can be avolded. What is the change in net income, If Frannie Fans buys the remotes?
2. Compute the difference in cost per unit between making and buying the remotes if \(\$ 20,040\) of the fixed costs can be avolded. What is the change in net Income, If Frannle Fans buys the remotes?
3. What is the change in net income if fixed cost of \(\$ 20,040\) can be avolded and Frannle could rent out the factory space no longer in use for \(\$ 20,040\)?
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Compute the difference in cost per unit between making and buying the remotes if none of the fixed costs can be avoided. What is the change in net income, if Frannie Fans buys the remotes?
E 7 - 1 1 ( Algo ) Analyzing Make or Buy Decision

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