a) Differential anlaysis
Make | Buy | Net income increase (decrease) | |
Direct material | 101920 | 101920 | |
Direct labor | 120640 | 120640 | |
Variable overhead | 65146 | 65146 | |
Fixed overhead | 46700 | 46700 | |
Purchase price | 345800 | -345800 | |
Total annual cost | 334406 | 392500 | -58094 |
b) No, Pottery ranch should make the finials
c) Yes income would increase by 8100
Exercise 20-5 Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The...
Pottery Ranch Inc, has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 57% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.81 and $4.54, respectively. Normal production is 35,000 curtain rods per year. A supplier offers to make a pair of finials at a price of...
Exercise 20-05 Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 65% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 29,700 curtain rods per year. A supplier offers to make a pair of finials at a...
Exercise 21-5 Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 68% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.85 and $4.97, respectively. Normal production is 25,300 curtain rods per year. A supplier offers to make a pair of finials at a...
Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100 % of capacity, and variable manufacturing overhead is charged to production atthe rate of 56 % of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 31,100 curtain rods per year. A supplier offers to make a pair of finials at a price...
Exercise 21-5 Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 63% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.51 and $4.73, respectively. Normal production is 28,300 curtain rods per year. A supplier offers to make a pair of finials at a...
Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 61% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.56 and $4.75, respectively. Normal production is 29,100 curtain rods per year. A supplier offers to make a pair of finials at a price of...
Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 69% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.89 and $5.00, respectively. Normal production is 26,600 curtain rods per year. A supplier offers to make a pair of finials at a price of...
Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 61% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 26,400 curtain rods per year. A supplier offers to make a pair of finials at a price of...
Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 69% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 25,400 curtain rods per year. A supplier offers to make a pair of finials at a price of...
Paused Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100 % of capacity, and variable manufacturing overhead is charged to production at the rate of 51 % of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 31,700 curtain rods per year A supplier offers to make a pair of finials at...