Manufacturing incurs unit costs of $8.10 ($5.10 variable and $3.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 19,800 of the parts for $5.70 per unit. If it accepts the offer, Emil will save all variable costs and $1 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Emil will realize by buying the part. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Number of units: Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost buy the part 19800 Per Unit 5.10 Make 00.00 Buy Net Income Increase (Decrease) 10000 10000
Manufacturing incurs unit costs of $8.10 ($5.10 variable and $3.00 fixed) in making a sub-assembly part for its finished product. A supplier offers to make 19,800 of the parts for $5.70 per unit. If it accepts the offer, Emil will save all variable costs and $1 of fixed costs. Prepare an analysis showing the total cost savings, if any, that Emil will realize by buying the part. (Round per unit answers to 2 decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Number of units: Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost buy the part 19800 Per Unit 5.10 Make 00.00 Buy Net Income Increase (Decrease) 10000 10000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format thanku
Transcribed Image Text:Emil Manufacturing incurs unit costs of $8.10 ($5.10 variable and $3.00 fixed) in making a sub-assembly part for its finished product.
A supplier offers to make 19,800 of the parts for $5.70 per unit. If it accepts the offer, Emil will save all variable costs and $1 of fixed
costs.
Prepare an analysis showing the total cost savings, if any, that Emil will realize by buying the part. (Round per unit answers to 2
decimal places, e.g. 15.25. If an amount reduces the net income then enter with a negative sign preceding the number,
e.g. -15,000 or parenthesis, e.g. (15,000).)
Number of units:
Variable manufacturing costs ✓
Fixed manufacturing costs
Purchase price
Total annual cost
The decision should be to
buy
part
19800
图片
x
Per Unit
5.10
Make
Buy
Net Income
Increase
(Decrease)
10000
0000
10000
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