Question

PRINTER VERSION BACK INEXT. De Review 21- Part Level Submission) Wilma Company must decide whether to make or buy some of its components. The cous produding .500 switches for its generators are as follows. Direct materials 130,700 Variable overhead $45,800 Director 21,150 od overhead R100 Instead of making the switches at an average cost of $200 (5181,250 - 62,5001, the company has an oportunity to buy the w s at 2.72 perust fourth of the fixed costs will be eliminated the company purchases the ches, all the wariable costs and one Your awer correct Prepare an incremental analysis showing whether the company should buy the switches 10700 Direct materials Direct labor Variable manufacturing costs Purchase price Total Wina Company will incur 51450 of additional the SHOW SOLUTION SHOW ANSWER (LINK TOTELI Dy accessing this Question Assistance, you will learn while you non based on the Point Potential Policy wat by your instructo Subsequent attempts) Your answer is partially correct. Try again Would your wer bedre the released productive capa generate dhenacome of $55.AYOT negative amount Total Cost Opportunity cost the shows that INSTORE By this question Assistance, you will Attemptsi 1 of CAVE FOR LATER EVITANSWER

Answer 1

2) Analysis

	Make	Buy	Net income increase (decrease)
Total Cost	181250	232700	-51450
Opportunity Cost	55470	0	55470
Total Cost	236720	232700	4020

Yes, The answer is Buy the analysis shows that net income will be increase by $4020