Variable Manufacturing Overhead = 2*105,000-94,500 = $115,500
Per box = 115,500/105,000 = $1.1
1.Manufacturing Cost per box it will be able to avoid will be:
Direct Material Cost 4.80*30% |
1.44 |
Direct Labor 3.2*10% |
0.32 |
Variable Manufacturing Overheads 1.1*10% |
0.11 |
Avoidable Cost |
1.87 |
i.e. $1.87 per box
2. Financial Advantage/(Disadvantage) per box if buys from outside = $1.87-$2 = $(0.13) i.e. disadvantage
3. Total Financial Advantage/(Disadvantage) = (0.13)*105,000= $(13,650)
4.Silven Industries should make the tubes
5. Maximum Price for a box of 24 tubes = Avoidable Cost = $1.87 per box
6. Cost of buying from outside supplier = $2*131,000 = $262,000
Producing = $1.87*131,000 + 46,000 = $290,970
Financial Advantage of buying from outside supplier = $28,970
Silven should BUY the tubes.
7. Silven should make 105,000 boxes of tubes since economical
BUY 26,000 boxes of tubes, will not need to buy equipment
I need the answer of Req6, please help me,thank you Problem 12-23 Make or Buy Decision...
PROBLEM 12-23 Make or Buy Decision LO12 Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin -3 After considerable research, a winter products line has been developed. However, Silven's president has decided to introduce only one of the new...
Problem 12-23 Make or Buy Decision [LO12-3] Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin After considerable research, a winter products line has been developed. However, Silven's president has decided to introduce only one of the new products...
Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize salesthroughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin.After considerable research, a winter products line has been developed. However, Silven's president has decided to introduce only one of the new products for thiscoming winter. If the product is a success,...
Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural...
Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. After considerable research, a winter products line has been developed. However, Silven’s president has decided to introduce only one of the new products for this coming winter. If the product...
Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. After considerable research, a winter products line has been developed. However, Silven’s president has decided to introduce only one of the new products for this coming winter. If the product...
Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. After considerable research, a winter products line has been developed. However Silven's president has decided to introduce only one of the new products for this coming winter. If the product...
Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. After considerable research, a winter products line has been developed. However, Silven’s president has decided to introduce only one of the new products for this coming winter. If the product...
Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. After considerable research, a winter products line has been developed. However, Silven’s president has decided to introduce only one of the new products for this coming winter. If the product...
Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. After considerable research, a winter products line has been developed. However, Silven’s president has decided to introduce only one of the new products for this coming winter. If the product...