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Accounting
Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost The decision should be to the part. 10 $

Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost The decision should be to the part. 10 $

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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Sandhill Industries incurs unit costs of $7 ($5 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 19,400 of the assembly part at $6 per unit. If the offer is accepted, Sandhill will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Sandhill 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).) Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost Make The decision should be to the part. eTextbook and Media $ Buy Net Income Increase (Decrease)
Transcribed Image Text:Sandhill Industries incurs unit costs of $7 ($5 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 19,400 of the assembly part at $6 per unit. If the offer is accepted, Sandhill will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Sandhill 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).) Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost Make The decision should be to the part. eTextbook and Media $ Buy Net Income Increase (Decrease)
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