10 acct questions 3

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Sandhill Industries incurs unit costs of $7 ($5 variable and $2 �xed) in making an assembly part for its �nished product. A supplier offers to make 19,400 of the assembly part at $6 per unit. If the offer is accepted, Sandhill will save all variable costs but no �xed costs. Prepare an analysis showing the total cost saving, if any, that Sandhill will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Make Buy Net Income

Increase (Decrease)

Variable manufacturing costs $ $ $

Fixed manufacturing costs

Purchase price

   Total annual cost $ $ $

The decision should be to the part.

221 HW5 Ch 22 Ch 23

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221 HW5 Ch 22 Ch 23

Question 7 of 10 - / 1