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M&S Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making a subassembly part for its finished product. A supplier offers to make 10,000 units þf the assembly parts at $6 per unit. If the offer is accepted, M&S will save all variable costs but no fixed costs. 1. Prepare the incremental analysis for the decision to make or buy the products. 2. Should M&S Industries make or buy the products. Costs types Make Buy Increase/ Decrease Net income

M&S Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making a subassembly part for its finished product. A supplier offers to make 10,000 units þf the assembly parts at $6 per unit. If the offer is accepted, M&S will save all variable costs but no fixed costs. 1. Prepare the incremental analysis for the decision to make or buy the products. 2. Should M&S Industries make or buy the products. Costs types Make Buy Increase/ Decrease Net income

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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M&S Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making a subassembly part for its finished product. A supplier offers to make 10,000 units of the assembly parts at $6 per unit. If the offer is accepted, M&S will save all variable costs but no fixed costs. 1. Prepare the incremental analysis for the decision to make or buy the products. 2. Should M&S Industries make or buy the products. Costs types Make Buy Increase/ Decrease Net income 田
Transcribed Image Text:M&S Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making a subassembly part for its finished product. A supplier offers to make 10,000 units of the assembly parts at $6 per unit. If the offer is accepted, M&S will save all variable costs but no fixed costs. 1. Prepare the incremental analysis for the decision to make or buy the products. 2. Should M&S Industries make or buy the products. Costs types Make Buy Increase/ Decrease Net income 田
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