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Oriole Company must decide whether to make or buy some of its components. The costs of producing 63,800 switches for its generators are as follows. Direct materials Direct labor (a) $29.100 $40,462 Instead of making the switches at an average cost of $2.99 ($190,762 +63,800), the company has an opportunity to buy the switches at $2.70 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. Direct materials Direct labor Variable overhead Fixed overhead Prepare an incremental analysis showing whether the company should make or buy the switches. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) Variable manufacturing costs $44,800 $76,400 Make $ Buy Net Income Increase (Decrease)

Oriole Company must decide whether to make or buy some of its components. The costs of producing 63,800 switches for its generators are as follows. Direct materials Direct labor (a) $29.100 $40,462 Instead of making the switches at an average cost of $2.99 ($190,762 +63,800), the company has an opportunity to buy the switches at $2.70 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. Direct materials Direct labor Variable overhead Fixed overhead Prepare an incremental analysis showing whether the company should make or buy the switches. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) Variable manufacturing costs $44,800 $76,400 Make $ Buy Net Income Increase (Decrease)

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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Oriole Company must decide whether to make or buy some of its components. The costs of producing 63,800 switches for its generators are as follows. Direct materials Direct labor (a) Instead of making the switches at an average cost of $2.99 ($190,762 +63,800), the company has an opportunity to buy the switches at $2.70 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. $29,100 Variable overhead $40,462 Fixed overhead Direct materials Prepare an incremental analysis showing whether the company should make or buy the switches. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45)) Direct labor Variable manufacturing costs $44,800 $76,400 $ Make Buy $ Net Income Increase (Decrease)
Transcribed Image Text:Oriole Company must decide whether to make or buy some of its components. The costs of producing 63,800 switches for its generators are as follows. Direct materials Direct labor (a) Instead of making the switches at an average cost of $2.99 ($190,762 +63,800), the company has an opportunity to buy the switches at $2.70 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. $29,100 Variable overhead $40,462 Fixed overhead Direct materials Prepare an incremental analysis showing whether the company should make or buy the switches. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45)) Direct labor Variable manufacturing costs $44,800 $76,400 $ Make Buy $ Net Income Increase (Decrease)
Direct materials Direct labor Variable manufacturing costs Fixed manufacturing costs Purchase price Total cost Oriole Company will incur $ Make Buy of additional costs if it $ Net Income Increase (Decrease) the switches.
Transcribed Image Text:Direct materials Direct labor Variable manufacturing costs Fixed manufacturing costs Purchase price Total cost Oriole Company will incur $ Make Buy of additional costs if it $ Net Income Increase (Decrease) the switches.
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