Homework Answers
Calculation of differential cost
| European Component | Own Component | |
| Units | 13 | 13 |
| Cost | $ 144,300.00 | $ 89,700.00 |
| Modification Cost | $ - | $ 11,050.00 |
| Total Cost | $ 144,300.00 | $ 100,750.00 |
| Cost Differential | $ 43,550.00 | |
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switches. The company is currently manufacturing all of its own
component parts. An outside supplier has offered to sell a switch
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its own cost of producing the switch internally:
Per
Unit
12,000 Units
per Year
Direct materials
$ 12
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Direct labour
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Variable manufacturing overhead
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8*
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