Question: This exact question has been asked again but it doesn't follow the same format and I can't tell what they are trying to say. home
This exact question has been asked again but it doesn't follow the same format and I can't tell what they are trying to say.
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Question: Wilma Company must decide whether to make or buy some of its components. The costs of producing 6...
Wilma Company must decide whether to make or buy some of its components. The costs of producing 65,900 switches for its generators are as follows.
Direct materials $31,000 Variable overhead $44,800 Direct labor $37,028 Fixed overhead $79,600
Instead of making the switches at an average cost of $2.92 ($192,428 65,900), the company has an opportunity to buy the switches at $2.75 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated.
Prepare an incremental analysis showing whether the company should buy the switches. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
| Make | Buy | Net Income Increase/Decrease | |
| Direct Materials | |||
| Direct Labor | |||
| Variable Manufacturing Costs | |||
| Fixed Manufacturing Costs | |||
| Purchase Price | |||
| Total Cost |
Would your answer be different if the released productive capacity will generate additional income of $52,747
| Make | Buy | Net Income Increase/Decrease | |
| Total Cost | |||
| Oppurtunity Cost | |||
| Total Cost |
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