Concord Industries incurs unit costs of $6 ($4 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 18,800 of the assembly part at $5 per unit. If the offer is accepted, Concord will save all variable costs but no fixed costs Prepare an analysis showing the total cost saving, if any, Concord 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).) Variable manufacturing costs $ Fixed manufacturing costs Purchase price Total annual cost The decision should be to $ Make make the part. 0 $ $ Buy 0 $ $ Net Income Increase (Decrease) 0
Concord Industries incurs unit costs of $6 ($4 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 18,800 of the assembly part at $5 per unit. If the offer is accepted, Concord will save all variable costs but no fixed costs Prepare an analysis showing the total cost saving, if any, Concord 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).) Variable manufacturing costs $ Fixed manufacturing costs Purchase price Total annual cost The decision should be to $ Make make the part. 0 $ $ Buy 0 $ $ Net Income Increase (Decrease) 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Vishu
Transcribed Image Text:Concord Industries incurs unit costs of $6 ($4 variable and $2 fixed) in making an assembly part for its finished product. A supplier
offers to make 18,800 of the assembly part at $5 per unit. If the offer is accepted, Concord will save all variable costs but no fixed costs.
Prepare an analysis showing the total cost saving, if any, Concord 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).)
Variable manufacturing costs $
Fixed manufacturing costs
Purchase price
Total annual cost
The decision should be to make
$
Make
the part.
0
+A
$
tA
Buy
0
Net Income
Increase (Decrease)
0
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