Manson Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 10,400 of the assembly part at $6 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e g. -45 or parentheses e g. (45).) Net Income Make Increase (Decrease) Buy $ $ Variable manufacturing costs $ Fixed manufacturing costs Purchase price $ $ Total annual cost the part. The decision should be to 3:02 PM ) 11/10/20 hp tA A
Manson Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to make 10,400 of the assembly part at $6 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e g. -45 or parentheses e g. (45).) Net Income Make Increase (Decrease) Buy $ $ Variable manufacturing costs $ Fixed manufacturing costs Purchase price $ $ Total annual cost the part. The decision should be to 3:02 PM ) 11/10/20 hp tA A
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Manson Industries incurs unit costs of $8 ($5 variable and $3 fixed) in making an assembly part for its finished product. A supplier offers to
make 10,400 of the assembly part at $6 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an
analysis showing the total cost saving, if any, Manson will realize by buying the part. (Enter negative amounts using either a negative sign
preceding the number e g. -45 or parentheses e g. (45).)
Net Income
Make
Increase (Decrease)
Buy
$
$
Variable manufacturing costs
$
Fixed manufacturing costs
Purchase price
$
$
Total annual cost
the part.
The decision should be to
3:02 PM
)
11/10/20
hp
tA
A
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