Make buy net income increase variable manufacturing costs

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Reference no: EM131204364

Manson Industries incurs unit costs of $7.65 ($4.34 variable and $3.31 fixed) in making a subassembly part for its finished product. A supplier offers to make 12,000 of the assembly part at $5.04 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson 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).)

Make Buy Net Income Increase (Decrease) Variable manufacturing costs $ $ $ Fixed manufacturing costs Purchase price Total annual cost $ $ $ Should Manson make or buy the part?

The decision should be to the part.

Reference no: EM131204364

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