MegaTech Solutions is currently buying 70,000 circuit boards from BoardMakers Inc. at a price of $72 per board. MegaTech is considering manufacturing its own circuit boards. The costs to produce the circuit boards are as follows: • Direct materials: $34 per unit Direct labor: $14 per unit • Variable factory overhead: $19 unit per • Fixed costs for the plant would increase by: $110,000 Which option should be selected and why? a. Make, $240,000 increase in profits b. Buy, $110,000 more in profits c. Make, $532,000 increase in profits d. Buy, $441,000 more in profits

MegaTech Solutions is currently buying 70,000 circuit boards from BoardMakers Inc. at a price of $72 per board. MegaTech is considering manufacturing its own circuit boards. The costs to produce the circuit boards are as follows: • Direct materials: $34 per unit Direct labor: $14 per unit • Variable factory overhead: $19 unit per • Fixed costs for the plant would increase by: $110,000 Which option should be selected and why? a. Make, $240,000 increase in profits b. Buy, $110,000 more in profits c. Make, $532,000 increase in profits d. Buy, $441,000 more in profits

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 3CMA: Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each...

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