Coyle Company manufactured 6,000 units of a component part that is used in its product...
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Coyle Company manufactured 6,000 units of a component part that is used in its product and incurred the following costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $35,000 15,000 10,000 20.000 $80,000 Another company has offered to sell the same component part to the company for $13 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the component part was purchased from the outside firm. If the component part is purchased from the outside firm, Coyle Company has the opportunity to use the factory equipment to produce another product which is estimated to have a contribution margin of $22,000. Prepare an incremental analysis report for Coyle Company which can serve as informational input into this make or buy decision. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45). Do not leave any field blank. Enter for the amounts.) Make Buy Increase (Decrease)
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