Refer to figure 12-1. Assume that the fixed manufacturing overhead reflects the

Question

Refer to figure 12-1. Assume that the fixed manufacturing overhead reflects the cost of Galaxy's manufacturing facility. This facility cannot be used for any other purpose. An outside supplier has offered to sell the component to Galaxy for $34. If Galaxy Industries purchases the component from the outside supplier, the effect on income would be a Zandy Beverage Company plans to eliminate a branch that has a contribution margin of $50,000 and fixed costs of $75,000. Of the fixed costs, $55,000 cannot be eliminated. The effect of eliminating this branch net income would be a(n) integal_ln3^ln8 (1 + e^x)^-1/2 e^x dx

Explanation / Answer

20 b. 30,000 increase

Total variable cost of the product is

Total                                                        480,000

Cost per unit = 480,000/15,000 = 32

Increase in cost if purchased will 34-32 = 2 per unit, 2*15,000 = 30,000

21. c. Decrease of 30,000

Direct materials 150000 Direct Labor 240000 Variable m/o/h 90000

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