Innova uses 1,000 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 $62.18 Direct labor 37.57 Overhead Total 126.50 $226.25 Overhead costs include variable material handling costs of $6.50, 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 60.00% variable costs and 40.00% fixed costs. A vendor has offered to supply the IMC2 component at a price of $250.00 per unit. (a) Prepare the incremental analysis for the decision to make or buy IMC2. Assume that no fixed costs will be eliminated if production is outsourced. (Round answers to 2 decimal places, e.g. 12.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Innova uses 1,000 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 $62.18 Direct labor 37.57 Overhead Total 126.50 $226.25 Overhead costs include variable material handling costs of $6.50, 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 60.00% variable costs and 40.00% fixed costs. A vendor has offered to supply the IMC2 component at a price of $250.00 per unit. (a) Prepare the incremental analysis for the decision to make or buy IMC2. Assume that no fixed costs will be eliminated if production is outsourced. (Round answers to 2 decimal places, e.g. 12.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Name: Meman Innova uses 1,000 units of the component IMC2 every month to man
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Description: Meman Innova uses 1,000 units of the component IMC2 every month to manufacture one of its products. The unit costs incurred tomanufacture the component are as follows.Direct materials$62.18Direct labor37.57126.50OverheadTotal$226.25Overhead costs inc

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 30P: Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following...

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