Please do not give image format Ivanhoe Company must decide whether to make or buy some of its components. The costs of producing 67,900 switches for itsgenerators are as follows.Direct materialsDirect labor(a)Instead of making the switches at an average cost of $2.94 ($199,626+67,900), the company has an opportunity to buy the switchesat $2.68 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated.materialsaborShow Transcribed TextstYour Answer Correct Answer$29,400$42,526manufacturing costsYour answer is correct.anufacturing costse priceVariable overheadFixed overheadWilma Company will incur $Make29400 i425264530082400199626$45,300$82,4000CBuy44146 of additional costs if it18197261800 i2437720buys0SAITULHAVIIIIncrease (Decrease)the switches.29400425264530020600-181972-44146 Would your answer be different if the released productive capacity will generate additional income of $47,816? (Enter negativeamounts using either a negative sign preceding the number eg. -45 or parentheses e.g. (45).)Total CostOpportunity costTotal cost$the answer iseTextbook and MediaMakeBuyThe analysis shows that net income will beNet IncomeIncrease (Decrease)by $

The company can either make its component or may also decide to buy from an outside supplier. The…

Ivanhoe Company must decide whether to make or buy some of its components. The costs of producing 67,900 switches for its generators are as follows. Direct materials Direct labor $29,400 Variable overhead $42.526 Fixed overhead $45,300 $82,400 Instead of making the switches at an average cost of $2.94 ($199,626+67,900), the company has an opportunity to buy the switches at $2.68 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated.

Ivanhoe Company must decide whether to make or buy some of its components. The costs of producing 67,900 switches for its generators are as follows. Direct materials Direct labor $29,400 Variable overhead $42.526 Fixed overhead $45,300 $82,400 Instead of making the switches at an average cost of $2.94 ($199,626+67,900), the company has an opportunity to buy the switches at $2.68 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated.

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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