(Answered) Question - rsw company manufactures 15000 units of wheel

Accounting

Question - RSW Company manufactures 15,000 units of wheel sets for use in its annual production. Costs are as follows:

Item	Cost
Direct materials	$42,000
Direct labor	63,000
Variable manufacturing overhead	58,000
Fixed manufacturing overhead	76,000

Rayco Company has offered to sell RSW 15,000 units of wheel sets for $14 per unit. If RSW accepts the offer, some of the facilities presently used to manufacture wheel sets could be rented to a third party at an annual rental of $25,500. In addition, $43,000 of fixed overhead would be totally eliminated.

Requirements: Prepare an incremental analysis schedule to demonstrate if RSW should accept Rayco's offer.

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