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How to prepare a differential analysis report

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Reference no: EM132558919

Grey Inc. has been purchasing a component, Z for $85 a unit. The company is currently operating at 75% of full capacity, and no significant increase in production is anticipated in the near future. The cost of manufacturing a unit of Z, determined by absorption costing method, is estimated as follows:

Direct materials                    $30
Direct labor                          15
Variable factory overhead          26
Fixed factory overhead               10
Total                                          $81

Question 1: How to Prepare a differential analysis report, dated March 12 of the current year, on the decision to make or buy Part Z.

Reference no: EM132558919

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