Kando Company incurs a $10.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $7.00 per unit and sell it for $11.20 per unit. If it does so, unit sales would remain unchanged and $7.00 of the $10.00 per unit costs of Product A would be eliminated. 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.) Make Buy Selling price per unit 2$ 13.50 2$ 11.20 0.00 Cost per unit to make Cost per unit to buy 7.00 Cost per unit not eliminated if bought 3.00 Income per unit 1.20 Company should: Make
Kando Company incurs a $10.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $7.00 per unit and sell it for $11.20 per unit. If it does so, unit sales would remain unchanged and $7.00 of the $10.00 per unit costs of Product A would be eliminated. 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.) Make Buy Selling price per unit 2$ 13.50 2$ 11.20 0.00 Cost per unit to make Cost per unit to buy 7.00 Cost per unit not eliminated if bought 3.00 Income per unit 1.20 Company should: Make
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Kando Company incurs a $10.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of
manufacturing and selling this product, the company can purchase it for $7.00 per unit and sell it for $11.20 per unit. If it does so, unit
sales would remain unchanged and $7.00 of the $10.00 per unit costs of Product A would be eliminated.
1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your
answers to 2 decimal places.)
Make
Buy
Selling price per unit
$
13.50
11.20
0.00
Cost per unit to make
7.00
Cost per unit to buy
3.00
Cost per unit not eliminated if bought
Income per unit
1.20
Company should:
Make
%24
%24
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