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Business
Accounting
Incremental future revenue Incremental future costs Direct materials Direct manufacturing labor Variable overhead (utilities and electricity) Materials-handling and setup overheads Incremental future operating income 3,400,000 1,000,000 600,000 500,000 8,000,000 5,500,000 2,500,000

Incremental future revenue Incremental future costs Direct materials Direct manufacturing labor Variable overhead (utilities and electricity) Materials-handling and setup overheads Incremental future operating income 3,400,000 1,000,000 600,000 500,000 8,000,000 5,500,000 2,500,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Incremental future revenue Incremental future costs Direct materials Direct manufacturing labor Variable overhead (utilities and electricity) Materials-handling and setup overheads Incremental future operating income Relevant cost: Make Buy Opportunity cost approach What is the total relevant cost for both alternatives? Make 17,500,000; Buy 16,000,000 Make 15,000,000; Buy 13,500,000 Make 17,500,000; Buy 2,500,000 None of the other alternatives are correct. Make 15,000,000; Buy 16,000,000 3,400,000 1,000,000 600,000 500,000 8,000,000 5,500,000 2,500,000 15,000,000 16,000,000
Transcribed Image Text:Incremental future revenue Incremental future costs Direct materials Direct manufacturing labor Variable overhead (utilities and electricity) Materials-handling and setup overheads Incremental future operating income Relevant cost: Make Buy Opportunity cost approach What is the total relevant cost for both alternatives? Make 17,500,000; Buy 16,000,000 Make 15,000,000; Buy 13,500,000 Make 17,500,000; Buy 2,500,000 None of the other alternatives are correct. Make 15,000,000; Buy 16,000,000 3,400,000 1,000,000 600,000 500,000 8,000,000 5,500,000 2,500,000 15,000,000 16,000,000
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