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Prepare an incremental analysis

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Question: Notson, Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for Notson for $420 each. Notson needs 1,200 clocks annually. Notson has provided the following unit costs for its commercial clocks:

Direct materials? $100

Direct labor? 140

Variable overhead? 80

Fixed overhead (40% avoidable)?150

Instructions: Prepare an incremental analysis which shows the effect of the make-or-buy decision.

Reference no: EM132758906

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