Blossom Industries incurs unit costs of $7 ($4 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 10,900 of the assembly part at $5 per unit. If the offer is accepted, Blossom will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Blossom 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).) Variable manufacturing costs $ Fixed manufacturing costs Purchase price Total annual cost The decision should be to eTextbook and Media $ Make ◆ the part. $ $ Buy $ $ Net Income Increase (Decrease)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Blossom Industries incurs unit costs of $7 ($4 variable and $3 fixed) in making an assembly part for its finished product. A supplier
offers to make 10,900 of the assembly part at $5 per unit. If the offer is accepted, Blossom will save all variable costs but no fixed costs.
Prepare an analysis showing the total cost saving, if any, that Blossom 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).)
Variable manufacturing costs
Fixed manufacturing costs
Purchase price
Total annual cost
The decision should be to
eTextbook and Media
+A
Make
◆ the part.
$
Buy
LA
$
Net Income
Increase (Decrease)
Transcribed Image Text:Blossom Industries incurs unit costs of $7 ($4 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 10,900 of the assembly part at $5 per unit. If the offer is accepted, Blossom will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Blossom 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).) Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost The decision should be to eTextbook and Media +A Make ◆ the part. $ Buy LA $ Net Income Increase (Decrease)
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