R&R Inc Produces Several Models of Clocks Instructions
Prepare an Incremental Analysis Which Shows the Effect of Has

Essay

R&R Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for R&R for $270 each. R&R needs 1500 clocks annually. R&R has provided the following unit costs for its commercial clocks: $$\begin{array} { l r } \text { Direct materials } & \$ 100 \\\text { Direct labor } & 110 \\\text { Variable overhead } & 30 \\\text { Fixed overhead (70\% avoidable) } & 150\end{array}$$ Instructions
Prepare an incremental analysis which shows the effect of the make-or-buy decision.