Total cost of producing 18,000 monitors $ 2,160,000 1,224,000 630,000 504,000 756,000 $ 5,274,000 You are asked to look over the intern's estimate before the information is shared with members of managemen them. The company's controller believes that the estimate may be incorrect because it includes costs that are r force currently employed in producing the monitors will be terminated and there would be no termination costs to suppliers to purchase materials, so all materials would need to be purchased to make the monitors. Variable manufacturing overhead costs would be reduced by $55,000, but non-manufacturing costs would remain the sa Fill in the differential analysis. Direct materials Direct labor Variable factory overhead Fixed manufacturing overhead Fixed non-manufacturing overhead Purchase price of 18,000 monitors Differential cost to make: Direct materials Direct labor Make or Buy Decisions Differential Analysis Report Overhead Differential income (loss) from making monitors Unit cost 2,160,000 1,224,000 $120 68 35 428 42 $293 X 3,816,000

Total cost of producing 18,000 monitors $ 2,160,000 1,224,000 630,000 504,000 756,000 $ 5,274,000 You are asked to look over the intern's estimate before the information is shared with members of managemen them. The company's controller believes that the estimate may be incorrect because it includes costs that are r force currently employed in producing the monitors will be terminated and there would be no termination costs to suppliers to purchase materials, so all materials would need to be purchased to make the monitors. Variable manufacturing overhead costs would be reduced by $55,000, but non-manufacturing costs would remain the sa Fill in the differential analysis. Direct materials Direct labor Variable factory overhead Fixed manufacturing overhead Fixed non-manufacturing overhead Purchase price of 18,000 monitors Differential cost to make: Direct materials Direct labor Make or Buy Decisions Differential Analysis Report Overhead Differential income (loss) from making monitors Unit cost 2,160,000 1,224,000 $120 68 35 428 42 $293 X 3,816,000

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

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 69P: (Appendix 3A) Separating Fixed and Variable Costs, Service Setting Louise McDermott, controller for...

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