Ellen Company manufactures kitchen utensils. Bolla Company has approached Ellen with a proposal to sell the company spatulas at a price of $100000 for 100000 units. Elllen is currently making the spatulas in its own factory. The following costs are associated with this part of the process when 100000 spatulas are produced: $\begin{array}{lr}
\text { Direct material } & \$ 41,000 \
\text { Direct labor } & 19,000 \
\text { Manufacturing overhead } & 50,000 \
\text { Total }&\$110,000
\end{array}$ The manufacturing overhead consists of $36000 of costs that will be eliminated if the components are no longer produced by Ellen. From Ellen's point of view how much is the incremental cost or savings if the spatulas are bought instead of made?

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The Answer of Ellen Company manufactures kitchen utensils. Bolla Company has approached Ellen with a proposal to sell the company spatulas at a price of $100000 for 100000 units. Elllen is currently making the spatulas in its own factory. The following costs are associated with this part of the process when 100000 spatulas are produced: $\begin{array}{lr}
\text { Direct material } & \$ 41,000 \
\text { Direct labor } & 19,000 \
\text { Manufacturing overhead } & 50,000 \
\text { Total }&\$110,000
\end{array}$ The manufacturing overhead consists of $36000 of costs that will be eliminated if the components are no longer produced by Ellen. From Ellen's point of view how much is the incremental cost or savings if the spatulas are bought instead of made?

Ellen Company Manufactures Kitchen Utensils The Manufacturing Overhead Consists of $36000 of Costs That Will