Kando Company incurs a $9 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 Product B for $5 per unit and sell it for $12 per unit. If it does so, unit sales would remain unchanged and $5 of the $9 per unit costs assigned to Product A would be eliminated. 1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase Product B 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 ...
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