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Instructor: Accounting, Fourth Edition by Kimmel, Weygandt, and Kieso Primer on Using Excel in Accounting by Rex A Schildhouse Date: Course: E23-4,...

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qattachments_3acf6e9edcf6ff6219b034df6239f7be3a193216.xlsx, Exercise E23-4, Page 1 of 1 Page(s), 07/26/201402:20:16 Name: Date: Instructor: Course: E23-4, Make incremental analysis for make-or-buy decision. Winters Inc. has been manufacturing its own shades for its table lamps. The company is currently operating at 100% of capacity. Variable manufacturing overhead is charged to production at the rate of 50% of direct labor cost. The direct materials and direct labor cost per unit to make the lamp shades are $4.00 and $6.00 , respectively. Normal production is 40,000 table lamps per year. A supplier offers to make the lamp shades at a price of $13.50 per unit. If Winters Inc. accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $40,000 of fixed manufacturing overhead currently being charged to the lamp shades will have to be absorbed by other products. Instructions: Make Buy Title Amount Amount Formula Title Amount Amount Formula Title Amount Amount Formula Title Amount Amount Formula Total annual cost Amount Amount Formula Total annual cost Formula Formula Formula Enter text answer here. produce income of $35,000 ? Enter text answer here. Make Buy Total annual cost (above) Amount Amount Formula Opportunity cost Amount Amount Formula Total cost Formula Formula Formula Accounting , Fourth Edition by Kimmel, Weygandt, and Kieso Primer on Using Excel in Accounting by Rex A Schildhouse (a) Prepare the incremental analysis for the decision to make or buy the lamp shades. Net Income Increase (Decrease) (b) Should Winters Inc. buy the lamp shades? (c) Would your answer be different in (b) if the productive capacity released by not making the lamp shades could be used to Net Income Increase (Decrease)
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Finance-8368967.xls

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