Business, 23.03.2020 21:29 recklessunreached

Mobility Partners makes wheelchairs and other assistive devices. For years it has made the rear wheel assembly for its wheelchairs. A local bicycle manufacturing firm, Trailblazers, Inc., offered to sell these rear wheel assemblies to Mobility. If Mobility makes the assembly, its cost per rear wheel assembly is as follows (based on annual production of 2,000 units). Direct materials $ 50 Direct labor 106 Variable overhead 32 Fixed overhead 94 Total $ 282 Trailblazers has offered to sell the assembly to Mobility for $220 each. The total order would amount to 2,000 rear wheel assemblies per year, which Mobility management will buy instead of make if Mobility can save at least $20,000 per year. Accepting Trailblazers offer would eliminate annual fixed overhead of $80,000. Required: a. Prepare a schedule that shows the total differential costs.

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Mobility Partners makes wheelchairs and other assistive devices. For years it has made the rear whee...