DDD Inc. (the company) manufactures leaf blowers. One of their divisions manufactures a switch which are used in several

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Ddd Inc The Company Manufactures Leaf Blowers One Of Their Divisions Manufactures A Switch Which Are Used In Several 1 (45.55 KiB) Viewed 42 times

Ddd Inc The Company Manufactures Leaf Blowers One Of Their Divisions Manufactures A Switch Which Are Used In Several 2 (35.68 KiB) Viewed 42 times

Ddd Inc The Company Manufactures Leaf Blowers One Of Their Divisions Manufactures A Switch Which Are Used In Several 3 (25.16 KiB) Viewed 42 times

DDD Inc. (the company) manufactures leaf blowers. One of their divisions manufactures a switch which are used in several of their leaf blowers. They produce 32,000 switches annually. The cost per unit for the switch is as follows: Per Unit Description Cost Direct materials $7.35 Direct labour $2.15 Variable overhead $1.75 Fixed overhead $2.20 Total cost $13.45 Of the total fixed overhead assigned to the switches, $48,000 is directly traceable to the production of the switch. The remaining fixed overhead costs are common fixed overhead and therefore unavoidable. An outside supplier has offered to sell the switches to the company for $8.00 per unit. Required: Analyze the above information and determine if the company should make or buy the switch
Enter one of the following in the space provided: M for make, B for buy, or NA for indifferent What is the most that the company would be willing to pay an outside supplier for one switch? If the company buys all of their switches from the supplier, would their operating income increase, decrease, or stay the same? Enter one of the following in the space provided: IN for increase, DE for decrease, and NA for stay the same. A If the company buys all of their switches from the supplier, by how much would their operating income change? Enter your answer as a positive number. A/
If the company could rent out the space that is currently used to produce the switches for $96,000 per year, should the company make or buy the switches? Enter one of the following in the space provided: M for make, B for buy, or NA for indifferent If the company buys the switches and then rents out the space that is currently used to produce the switches for $96,000 per year, by how much would their operating income change? Enter your answer as a positive number.