Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,240 remotes is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total Cont $ 66,560 $56,320 Frannie is approached by Lincoln Company, which offers to make the remotes for $18 per unit. Required: Required 1 Required 2 $ 30,720 $ $1,200 $ 204,800 1. 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? 2. Compute the difference in cost per unit between making and buying the remotes if $20,480 of the fixed costs can be avoided. What is the change in net income, if Frannie Fans buys the remotes? 3. What is the change in net income if fixed cost of $20,480 can be avoided and Frannie could rent out the factory space no longer in use for $20,480? Complete this question by entering your answers in the tabs below. Difference in cost Change in net income Required 3 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? per unit Required 1 Required 2 >

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question

Please do not give solution in image format thanku 

Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,240
remotes is as follows:
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total
Cont
$ 66,560
$56,320
Frannie is approached by Lincoln Company, which offers to make the remotes for $18 per unit.
Required:
Required 1 Required 2
$ 30,720
$ $1,200
$ 204,800
1. 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?
2. Compute the difference in cost per unit between making and buying the remotes if $20,480 of the fixed costs can be avoided.
What is the change in net income, if Frannie Fans buys the remotes?
3. What is the change in net income if fixed cost of $20,480 can be avoided and Frannie could rent out the factory space no longer in
use for $20,480?
Complete this question by entering your answers in the tabs below.
Difference in cost
Change in net income
Required 3
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?
per unit
Required 1
Required 2 >
Transcribed Image Text:Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,240 remotes is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total Cont $ 66,560 $56,320 Frannie is approached by Lincoln Company, which offers to make the remotes for $18 per unit. Required: Required 1 Required 2 $ 30,720 $ $1,200 $ 204,800 1. 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? 2. Compute the difference in cost per unit between making and buying the remotes if $20,480 of the fixed costs can be avoided. What is the change in net income, if Frannie Fans buys the remotes? 3. What is the change in net income if fixed cost of $20,480 can be avoided and Frannie could rent out the factory space no longer in use for $20,480? Complete this question by entering your answers in the tabs below. Difference in cost Change in net income Required 3 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? per unit Required 1 Required 2 >
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 5 steps

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education