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How much is the incremental cost or savings

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Question - Bramble Corp. manufactures widgets. Embree Company has approached Bramble with a proposal to sell the company widgets at a price of $140000 for 100000 units. Bramble is currently making these components in its own factory. The following costs are associated with this part of the process when 100000 units are produced:

Direct materials $46500

Direct labor 43500

Manufacturing overhead 60000

Total $150,000

The manufacturing overhead consists of $30000 of costs that will be eliminated if the components are no longer produced by Bramble. From Bramble's point of view, how much is the incremental cost or savings if the widgets are bought instead of made?

Reference no: EM132694871

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