Kando Company incurs a $11.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $6.00 per unit and sell it for $11.30 per unit. If it does so, unit sales would remain unchanged and $6.00 of the $11.00 per unit costs of Product A would be eliminated.
1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.)
In the format below:
Manufacture A Purchase Product B
sales
costs
aviodable cost
unavoidable costs
cost to purchase
totals costs
sales
The company should...