Coyle Company manufactured 6,000 units of a component part that is used in its product and incurred the following costs:
Homework Answers
Answer:-
| Coyale Company | |||
| Incremental analysis report | |||
| Particulars | Make | Buy | Increase (Decrease) |
| $ | $ | $ | |
| Direct Materials | 35000 | 0 | 35000 |
| Direct Labor | 15000 | 0 | 15000 |
| Variable manufacturing overhead | 10000 | 0 | 10000 |
| Fixed manufacturing overhead | 20000 | 20000 | 0 |
| Purchase price | 0 | 6000 units*$13 = $78000 | -78000 |
| Total annual cost | 80000 | 98000 | -18000 |
| Opportunity cost | 22000 | 0 | 22000 |
| Total cost | 102000 | 98000 | 4000 |
Coyale company should purchased the product from outside supplier, it will increase their income by $4000.
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Coyle Company manufactured 6,000 units of a component part that is used in its product and incurred the following costs:
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