Coyle Company manufactured 6,000 units of a component part that is used in its product and incurred the following costs: Direct materials $35,000 Direct labor 15,000 Variable manufacturing overhead...

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Coyle Company manufactured 6,000 units of a component part that is used in its product and incu
ed the following costs: Direct materials $35,000 Direct labor 15,000 Variable manufacturing overhead 10,000 Fixed manufacturing overhead 20,000 $80,000 Another company has offered to sell the same component part to the company for $13 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the component part was purchased from the outside firm. If the component part is purchased from the outside firm, Coyle Company has the opportunity to use the factory equipment to produce another product which is estimated to have a contribution margin of $22,000. Prepare an incremental analysis report for Coyle Company which can serve as informational input into this make or buy decision. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g XXXXXXXXXXDo not leave any field blank. Enter 0 for the amounts.) Make Buy Increase (Decrease) Direct Materials $ 35000 $ 0 $ 35000 Direct Labor

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Answered Same Day May 27, 2021

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Ashish answered on May 27 2021

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Coyle Company manufactured 6,000 units of a component part that is used in its product and incurred the following costs: Direct materials $35,000 Direct labor 15,000 Variable manufacturing overhead...

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