Cost of making | Cost of buying | Increase/Decrease in income | |
Direct material | 26,000 x 4 = 104,000 | 0 | 104,000 |
Direct labor | 26,000 x 9 = 234,000 | 0 | 234,000 |
Variable manufacturing overhead | 26,000 x 2 = 52,000 | 0 | 52,000 |
Fixed manufacturing overhead | 26,000 x 9 = 234,000 | 26,000 x 6 = 156,000 | 78,000 |
Opportunity cost | 76,000 | 0 | 76,000 |
Outside supplier's price | 0 | 26,000 x 20 = 520,000 | -520,000 |
Total cost | $700,000 | $676,000 | $24,000 |
Financial advantages of accepting outside supplier's offer = $24,000
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help please Help 6 Han Products manufactures 26,000 units of part S-6 each year for use...
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