Question

Check my work Kando Company incurs a $11.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $5.00 per unit and sell it for $10.60 per unit. If it does so, unit sales would remain unchanged and $5.00 of the $11.00 per unit costs of Product A would be eliminated. 1.42 points 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.) eBook Manufacture Product A Purchase Hint Ask Print Sales Costs: Avoidable costs Unavoidable costs Cost to purchase Total costs References The company should

Answer 1

	Manufacture product A	Purchase product A
Sales	$                                     13.50	$                             10.60
Costs
Avoidable costs	$                                       5.00
Unavoidable costs	$                                       6.00	$                               6.00
Cost to purchase		$                               5.00
Total costs	$                                     11.00	$                             11.00

The company should manufacture the product

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