Lily Industries incurs unit costs of $7 ($5 variable and $2 fixed) in making an...
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Lily Industries incurs unit costs of $7 ($5 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 14,700 of the assembly part at $6 per unit. If the offer is accepted, Lily will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Lily 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).) Net Income Increase (Decrease) Make Buy Variable manufacturing $ tA costs Fixed manufacturing costs Purchase price $ Total annual cost The decision should be to the part
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