Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost...
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Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,080 remotes is as follows: Cost Direct materials Direct labor Variable overhead Fixed overhead Total $ 65,520 $ 55,440 $ 30,240 $ 50,400 $ 201,600 Frannie is approached by Lincoln Company which offers to make the remotes for $18 per unit. Required: 1. Compute the difference in cost between making and buying the remotes if none of the fixed costs can be avoided. What is the change in net income? 2. Compute the difference in cost between making and buying the remotes if $20,160 of the fixed costs can be avoided. What is the change in net income? 3. What is the change in net income if fixed cost of $20,160 can be avoided and Frannie could rent out the factory space no longer in use for $20,160? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the difference in cost between making and buying the remotes if none of the fixed costs can be avoided. What is the change in net income? per unit Difference in cost Change in net income
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