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Make the incremental analysis for the decision

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Question - Joseph uses 1,100 units of the component IMC2 every month to manufacture one of its products. The unit costs incurred to manufacture the component are as follows.

Direct materials $53.62

Direct labor 36.21

Overhead 126.50

Total $221.33

Overhead costs include variable material handling costs of $7.50, which are applied to products on the basis of direct material costs. The remainder of the overhead costs are applied on the basis of direct labor dollars and consist of 60% variable costs and 40% ?xed costs.

A vendor has offered to supply the |MC2 component at a price of $240 per unit.

(a) Make the incremental analysis for the decision to make or buy IMC2.

Reference no: EM132606974

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