Please help me with show all calculation thanku Cuyahoga Valley Bicycles uses a standard part in the manufacture of several of its bikes. Thecost of producing 40,000 parts is $138,000, which includes fixed costs of $68,000 and variablecosts of $70,000. The company can buy the part from an outside supplier for $3.00 per unit, andavoid 30% of the fixed costs.Assume that factory space freed up by purchasing the part from an outside source can be usedto manufacture another product that can be sold for $12,000 profit. If Cuyahoga Valley Bicyclesmakes the part instead of buying the part, what will the difference in operating income be?Should the company make or buy the part? Show your work.

The differential analysis is performed to compare the different alternatives available with the…

avoid 30% of the fixed costs. Assume that factory space freed up by purchasing the part from an outside source can be use to manufacture another product that can be sold for $12,000 profit. If Cuyahoga Valley Bicycle makes the part instead of buying the part, what will the difference in operating income be? Should the company make or buy the part? Show your work.

avoid 30% of the fixed costs. Assume that factory space freed up by purchasing the part from an outside source can be use to manufacture another product that can be sold for $12,000 profit. If Cuyahoga Valley Bicycle makes the part instead of buying the part, what will the difference in operating income be? Should the company make or buy the part? Show your work.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 3CMA: Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each...

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