Current Attempt in Progress Blossom Industries incurs unit costs of $7 ($4 variable and $3 foxed) in making an assembly part for its finished product. A supplier offers to make 10,900 of the assembly part at $5 per unit. If the offer is accepted, Blossom will save all variable costs but no feed costs Prepare an analysis showing the total cost saving, if any, Blossom will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) Net Income Increase (Decrease) Make Buy Variable manufacturing costs S 43.600 Fixed manufacturing costs 32700 32700 Purchase price Total annual cost 43600

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 54P
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Current Attempt in Progress
Blossom Industries incurs unit costs of $7 ($4 variable and $3 foxed) in making an assembly part for its finished product. A supplier
offers to make 10,900 of the assembly part at $5 per unit. If the offer is accepted, Blossom will save all variable costs but no freed costs
Prepare an analysis showing the total cost saving, if any, Blossom will realize by buying the part. (Enter negative amounts using either a
negative sign preceding the number eg -45 or parentheses e.g. (45))
Net Income
Make
Buy
Increase (Decrease)
$
Variable manufacturing costs
$
43.600
5
Fixed manufacturing costs
32700
Purchase price
Total annual cost
The decision should be to
Save for Later
S
the part.
$
43600
$
Attempts: 0 of 1 used Submit A
32700
Transcribed Image Text:Current Attempt in Progress Blossom Industries incurs unit costs of $7 ($4 variable and $3 foxed) in making an assembly part for its finished product. A supplier offers to make 10,900 of the assembly part at $5 per unit. If the offer is accepted, Blossom will save all variable costs but no freed costs Prepare an analysis showing the total cost saving, if any, Blossom will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number eg -45 or parentheses e.g. (45)) Net Income Make Buy Increase (Decrease) $ Variable manufacturing costs $ 43.600 5 Fixed manufacturing costs 32700 Purchase price Total annual cost The decision should be to Save for Later S the part. $ 43600 $ Attempts: 0 of 1 used Submit A 32700
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