Question

Crane Industries incurs unit costs of $6 ($4 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 17,900 of the assembly part at $5 per unit. If the offer is accepted, Crane will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Crane will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45)). Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost Make Buy Net Income Increase (Decrease) $ $ $ The decision should be to the part $

          Crane Industries incurs unit costs of $6 ($4 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 17,900 of the assembly part at $5 per unit. If the offer is accepted, Crane will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Crane will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45)).
Variable manufacturing
costs
Fixed manufacturing costs
Purchase price
Total annual cost
Make
Buy
Net Income
Increase (Decrease)
$
$
$
The decision should be to
the part
$

Crane Industries incurs unit costs of 6 (4 variable and 2 fixed) in making an assembly part for its finished product. A supplier offers to make 17,900 of the assembly part at5 per unit. If the offer is accepted, Crane will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Crane will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45)).
Variable manufacturing
costs
Fixed manufacturing costs
Purchase price
Total annual cost
Make
Buy
Net Income
Increase (Decrease)

The decision should be to
the part

Added by Jennifer H.

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