Sheridan Inc. has been manufacturing its own shades for its table lamps. The company is currently operating at 100% of capacity, andvariable manufacturing overhead is charged to production at the rate of 50% of direct labour costs. The direct materials and directlabour costs per unit to make the lampshades are $4.50 and $5.50, respectively. Normal production is 48,000 table lamps per year.A supplier offers to make the lampshades at a price of $13.20 per unit. If Sheridan Inc. accepts the supplier's offer, all variablemanufacturing costs will be eliminated, but the $40,000 of fixed manufacturing overhead currently being charged to the lampshadeswill have to be absorbed by other products.Prepare the incremental analysis for the decision to make or buy the lampshades. (Round answers to O decimal places, e.g. 5,275. Ifan amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Whilealternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.)Number of units: 48,000Sheridan Inc. shouldeTextbook and MediaShould Sheridan Inc. buy the lampshades?<, income would>eTextbook and Media$VMakethe lampshades.by $$BuyWould your answer be different in part (b) if the productive capacity released by not making the lampshades could be used toproduce income of $33,600?$Net IncomeIncrease (Decreas

Make or Buy Decision :— it is the important decision since it effect the productivity of the…

Prepare the incremental analysis for the decision to make or buy the lampshades. (Round answers to 0 decimal places, e.g. 5,275. 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). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) Number of units: 48,000 Sheridan Inc. should eTextbook and Media > Should Sheridan Inc. buy the lampshades? $ ✓, income would $ Make the lampshades. by $ k $ LA $ Buy $ $ Would your answer be different in part (b) if the productive capacity released by not making the lampshades could be used to produce income of $33,600? Net Income Increase (Decreas

Prepare the incremental analysis for the decision to make or buy the lampshades. (Round answers to 0 decimal places, e.g. 5,275. 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). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) Number of units: 48,000 Sheridan Inc. should eTextbook and Media > Should Sheridan Inc. buy the lampshades? $ ✓, income would $ Make the lampshades. by $ k $ LA $ Buy $ $ Would your answer be different in part (b) if the productive capacity released by not making the lampshades could be used to produce income of $33,600? Net Income Increase (Decreas

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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