Required information
[The following information applies to the questions
displayed below.]
Mel’s Meals 2 Go purchases cookies that it includes in the 10,000
box lunches it prepares and sells annually. Mel’s kitchen and
adjoining meeting room operate at 70 percent of capacity. Mel’s
purchases the cookies for $0.86 each but is considering making them
instead. Mel’s can bake each cookie for $0.33 for materials, $0.15
for direct labor, and $0.57 for overhead without increasing its
capacity. The $0.57 for overhead includes an allocation of $0.36
per cookie for fixed overhead. However, total fixed overhead for
the company would not increase if Mel’s makes the cookies.
Mel himself has come to you for advice. “It would cost me $1.05 to
make the cookies, but only $0.86 to buy. Should I continue buying
them?” Materials and labor are variable costs, but variable
overhead would be only $0.21 per cookie. Two cookies are put into
every lunch.
Mel suddenly finds an opportunity to sell boxed dinners. The new opportunity would require the use of the 30 percent unused capacity. The contribution margin from the dinners would amount to $3,600 annually.
Required:
a. If Mel decides to sell dinners, what are the total costs for both making and buying the cookies?
b. Should Mel continue to buy the cookies?
Yes
No
Required information [The following information applies to the questions displayed below.] Mel’s Meals 2 Go purchases...
Required information (The following information applies to the questions displayed below.) Mel's Meals 2 Go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel's kitchen and adjoining meeting room operate at 70 percent of capacity. Mel's purchases the cookies for $0.66 each but is considering making them instead. Mel's can bake each cookie for $0.20 for materials, $0.18 for direct labor, and $0.63 for overhead without increasing its capacity. The $0.63 for overhead...
Mel’s Meals 2 Go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel’s kitchen and adjoining meeting room operate at 70 percent of capacity. Mel’s purchases the cookies for $0.78 each but is considering making them instead. Mel’s can bake each cookie for $0.28 for materials, $0.15 for direct labor, and $0.53 for overhead without increasing its capacity. The $0.53 for overhead includes an allocation of $0.34 per cookie for fixed overhead. However,...
! Required information [The following information applies to the questions displayed below.) Mel's Meals 2 Go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel's kitchen and adjoining meeting room operate at 70 percent of capacity. Mel's purchases the cookies for $0.78 each but is considering making them instead. Mel's can bake each cookie for $0.28 for materials, $0.15 for direct labor, and $0.53 for overhead without increasing its capacity. The $0.53 for...
Required information (The following information applies to the questions displayed below.) Mel's Meals 2 Go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel's kitchen and adjoining meeting room operate at 70 percent of capacity. Mel's purchases the cookies for $0.66 each but is considering making them instead. Mel's can bake each cookie for $0.20 for materials, $0.18 for direct labor, and $0.63 for overhead without increasing its capacity. The $0.63 for overhead...
requirea information The following information applies to the questions displayed below.) Mel's Meals 2 Go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel's kitchen and adjoining meeting room operate at 70 percent of capacity. Mel's purchases the cookies for $0.60 each but is considering making them instead. Mel's can bake each cookie for $0.20 for materials, $0.15 for direct labor, and $0.45 for overhead without increasing its capacity. The $0.45 for overhead...
Required information
[The following information applies to the questions displayed
below.]
Mel’s Meals 2 Go purchases cookies that it includes in the
10,000 box lunches it prepares and sells annually. Mel’s kitchen
and adjoining meeting room operate at 70 percent of capacity. Mel’s
purchases the cookies for $0.60 each but is considering making them
instead. Mel’s can bake each cookie for $0.20 for materials, $0.15
for direct labor, and $0.45 for overhead without increasing its
capacity. The $0.45 for overhead...
Domingo Corporation makes a variety of headphones with logos. The company has discovered a new market for wireless headphones with logos. Market research indicates that these headphones would sell well in the market priced at $40.00 each. Domingo desires an operating profit of 25 percent of costs. Required: What is the highest acceptable manufacturing cost for which Domingo would be willing to produce the headphones? 2. Mel’s Meals 2 Go purchases cookies that it includes in the 10,000 box lunches...
Mel’s Meals 2 Go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel’s kitchen and adjoining meeting room operate at 70 percent of capacity. Mel’s purchases the cookies for $0.78 each but is considering making them instead. Mel’s can bake each cookie for $0.28 for materials, $0.15 for direct labor, and $0.53 for overhead without increasing its capacity. The $0.53 for overhead includes an allocation of $0.34 per cookie for fixed overhead. However,...
[The following information applies to the questions displayed below.) Mel's Meals 2 Go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel's kitchen and adjoining meeting room operate at 70 percent of capacity. Mel's purchases the cookies for $0.66 each but is considering making them instead. Mel's can bake each cookie for $0.20 for materials, $0.18 for direct labor, and $0.63 for overhead without increasing its capacity. The $0.63 for overhead includes an...
Required Information (The following information applies to the questions displayed below.) Mel's Meals 2 Go purchases cookies that it includes in the 10,000 box lunches it prepares and sells annually. Mel's kitchen and adjoining meeting room operate at 70 percent of capacity. Mel's purchases the cookies for $0.66 each but is considering making them instead. Mel's can bake each cookle for $0.20 for materials, $0.18 for direct labor, and $0.63 for overhead without increasing its capacity. The $0.63 for overhead...