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Manson Industries incurs unit costs of $7 ($5 variable and $2 fixed) in making an...

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Accounting

Manson 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 18,300 of the assembly part at $6 per unit. If the offer is accepted, Manson will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, Manson 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 $enter variable manufacturing costs in dollars $enter variable manufacturing costs in dollars $enter variable manufacturing costs in dollars
Fixed manufacturing costs enter fixed manufacturing costs in dollars enter fixed manufacturing costs in dollars enter fixed manufacturing costs in dollars
Purchase price enter the purchase price in dollars enter the purchase price in dollars enter the purchase price in dollars
Total annual cost $enter total annual cost in dollars $enter total annual cost in dollars $enter total annual cost in dollars

The decision should be to select between make and buy buymake the part.

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