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question radio company makes several models of radios for the autoindustry one of th 4294468

Question

. Radio Company makes several models of radios for the autoindustry. One of the components is currently purchase for $ 220.00per 100 units. Management is reviewing the possibility of makingthe part in-house. Annual production of this one model radio is70,000 units. Fixed costs are $ 38,500.00 (which is unchangedwhether the part is made or purchased), variable cost per unit fordirect materials is $ 0.70, $ 0.55 per unit for direct labor, and $0.70 per unit for variable overhead. Using the incrementalanalysis, make a decision as to whether Radio Company shouldmanufacture the part or purchase the part from an outside vendor.(8 points) Difference Make Buy In favor of Make Direct Materials__________________ _________ _________ _____________ Direct Labor__________________ _________ _________ _____________ VariableOverhead _______________ _________ _________ _____________Purchased Parts _________________ _________ _________ _____________Totals $ _________ $ _________ $ _____________ Decision:____________________________________________________________________

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