Innova uses 1,000 units of the component IMC2 every month to manufacture one of its products....
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 $62.58 Direct labor 39.79 Overhead 126.50 Total $228.87 Overhead costs include variable material handling costs of $7.50, 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% variable costs and 40% fixed costs. A vendor has offered to supply the IMC2 component at a price of $210 per unit. (a) Prepare the incremental analysis for the decision to make or buy IMC2. (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).) Make IMC2 (per unit) Buy IMC2 (per unit) Net Income Increase (Decrease) Direct material $ $ $ Direct labor Material handling Variable overhead Purchase price Total unit cost $ $ $ Should Innova purchase the component from the outside vendor if Innova’s capacity remains idle?
Homework Answers
| Make | Buy | Net Income Increase | |
| Direct material | 62.58 | 62.58 | |
| Direct labor | 39.79 | 39.79 | |
| Material handling | 7.5 | 7.5 | |
| Variable overhead | 71.4 | 71.4 | |
| Purchase price | 210 | -210 | |
| Total unit cost | 181.27 | 210 | -28.73 |
| No, Should not purchase | |||
Fixed costs will be incurred under both the cases and hence are irrelevant
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Innova uses 1,000 units of the component IMC2 every month to
manufacture one of its products....
Innova uses 1,000 units of the component IMC2 every month to manufacture one of its products....
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 Direct labor Overhead Total $64.53 37.63 126.50 $228.66 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% variable costs and...
Innova uses 1,100 units of the component IMC2 every month to manufacture one of its products....
Innova uses 1,100 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 Direct labor Overhead Total $55.43 38.12 126.50 $220.05 Overhead costs include variable material handling costs of $7.50, 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% variable costs and...
Innova uses 1,050 units of the component IMC2 every month to manufacture one of its products....
Innova uses 1,050 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 $55.34 Direct labor 39.31 Overhead 126.50 $221.15 Total Overhead costs include variable material handling costs dollars and consist of 60% variable costs and 40% fixed costs. .76, which are applied to products on the basis direct material costs. The remainder of the overhead costs are applied on the basis of direct...
Current Attempt in Progress Innova uses 1,100 units of the component IMC2 every month to manufacture...
Current Attempt in Progress Innova uses 1,100 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 Direct labor Overhead Total $55.34 39.31 126.50 $221.15 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...
Innova uses 1,000 units of the component IMC2 every month to manufacture one of its products....
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
$ 65.00
Direct labor
45.00
Overhead
126.50
Total
$236.50
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% variable costs...
Exercise 20-08 a Innova uses 1,100 units of the component IMC2 every month to manufacture one...
Exercise 20-08 a Innova uses 1,100 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 Direct labor Overhead Total $63.96 41.72 126.50 $232.18 Overhead costs include variable material handling costs of $7.50, 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%...
Innova uses 1,000 units of the component IMC2 every month to manufacture one of its products....
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
$ 65.00
Direct labor
45.00
Overhead
126.50
Total
$236.50
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% variable costs...
Innova uses 1,000 units of the component IMC2 every month to manufacture one of its products....
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 Direct labor Overhead Total $65.00 45.00 126.50 $236.50 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% variable costs and...
Edward uses 1,100 units of the component IMC2 every month to manufacture one of its products....
Edward uses 1,100 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 $59.68 Direct labor 39.11 Overhead 126.50 Total $225.29 Overhead costs include various material handling costs of $7.50, 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% variable costs and...
View Policies Current Attempt in Progress Innova uses 1000 units of the component IMC2 every month...
View Policies Current Attempt in Progress Innova uses 1000 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 Direct labor Overhead Total $55.00 35.00 12650 $216.50 Overhead costs include variable material handing 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...
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 Direct labor Overhead Total $64.53 37.63 126.50 $228.66 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% variable costs and...
Innova uses 1,100 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 Direct labor Overhead Total $55.43 38.12 126.50 $220.05 Overhead costs include variable material handling costs of $7.50, 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% variable costs and...
Innova uses 1,050 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 $55.34 Direct labor 39.31 Overhead 126.50 $221.15 Total Overhead costs include variable material handling costs dollars and consist of 60% variable costs and 40% fixed costs. .76, which are applied to products on the basis direct material costs. The remainder of the overhead costs are applied on the basis of direct...
Current Attempt in Progress Innova uses 1,100 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 Direct labor Overhead Total $55.34 39.31 126.50 $221.15 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...
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
$ 65.00
Direct labor
45.00
Overhead
126.50
Total
$236.50
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% variable costs...
Exercise 20-08 a Innova uses 1,100 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 Direct labor Overhead Total $63.96 41.72 126.50 $232.18 Overhead costs include variable material handling costs of $7.50, 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%...
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
$ 65.00
Direct labor
45.00
Overhead
126.50
Total
$236.50
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% variable costs...
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 Direct labor Overhead Total $65.00 45.00 126.50 $236.50 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% variable costs and...
View Policies Current Attempt in Progress Innova uses 1000 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 Direct labor Overhead Total $55.00 35.00 12650 $216.50 Overhead costs include variable material handing 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...
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