Solution-Prepare a incremental analysis showing

Prepare a incremental analysis showing

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Reference no: EM132755055

Wilma Company must decide whether to make or buy some of its components. The costs of producing 63,800 switches for its generators are as follows.

Direct materials $29,300

Variable overhead $44,200

Direct labor $30,634

Fixed overhead $82,800

Instead of making the switches at an average cost of $2.93 ($186,934 ÷ 63,800), the company has an opportunity to buy the switches at $2.74 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated.

Problem 1: Prepare a incremental analysis showing whether the company should make or buy the switches

Reference no: EM132755055

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Prepare a incremental analysis showing

Reference no: EM132755055

Reference no: EM132755055

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