Net IncomeIncrease (Decrease)Sunland Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supplieroffers to make 10,300 of the assembly part at $6 per unit. If the offer is accepted, Sunland will save all variable costs but no fixed costs.Prepare an analysis showing the total cost saving, if any, that Sunland will realize by buying the part. (Enter negative amounts using eithera negative sign preceding the number e.g. -45 or parentheses e.g. (45).)AVariable manufacturing costsFixed manufacturing costsPurchase priceMakeTotal annual cost$The decision should be tothe part.ABuy$A

Please refer to the above explanation. Thank you!

Answered: Net Income Increase (Decrease) Sunland…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 9E: Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs...

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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 10,400 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).) Net Income Make Increase (Decrease) Buy $ $ Variable manufacturing costs $ Fixed manufacturing costs Purchase price $ $ Total annual cost the part. The decision should be to 3:02 PM ) 11/10/20 hp tA A
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