Homework Answers
Solution 1:
| Differential Analysis - Making Drum (alt 1) or Buy Drum (Alt2) - 75000 drums | |||
| Particulars | Making Drum (Alt 1) | Buy Drum (Alt 2) | Financial advantage (Disadvantage) of buying (Alternative 2) |
| Costs: | |||
| Purchase Price (75000*$20) | $0.00 | $1,500,000.00 | -$1,500,000.00 |
| Direct material | $832,500.00 | $0.00 | $832,500.00 |
| Direct Labor | $337,500.00 | $0.00 | $337,500.00 |
| Variable overhead | $90,000.00 | $0.00 | $90,000.00 |
| Supervisory Salary - Avoidable | $75,000.00 | $0.00 | $75,000.00 |
| Equipment Rent - Avoidable | $225,000.00 | $0.00 | $225,000.00 |
| Total cost | $1,560,000.00 | $1,500,000.00 | $60,000.00 |
Solution 2:
| Differential Analysis - Making Drum (alt 1) or Buy Drum (Alt2) - 93750 drums | |||
| Particulars | Making Drum (Alt 1) | Buy Drum (Alt 2) | Financial advantage (Disadvantage) of buying (Alternative 2) |
| Costs: | |||
| Purchase Price (93750*$20) | $0.00 | $1,875,000.00 | -$1,875,000.00 |
| Direct material | $1,040,625.00 | $0.00 | $1,040,625.00 |
| Direct Labor | $421,875.00 | $0.00 | $421,875.00 |
| Variable overhead | $112,500.00 | $0.00 | $112,500.00 |
| Supervisory Salary - Avoidable | $75,000.00 | $0.00 | $75,000.00 |
| Equipment Rent - Avoidable | $225,000.00 | $0.00 | $225,000.00 |
| Total cost | $1,875,000.00 | $1,875,000.00 | $0.00 |
Solution 3:
| Differential Analysis - Making Drum (alt 1) or Buy Drum (Alt2) - 125000 drums | |||
| Particulars | Making Drum (Alt 1) | Buy Drum (Alt 2) | Financial advantage (Disadvantage) of buying (Alternative 2) |
| Costs: | |||
| Purchase Price (125000*$20) | $0.00 | $2,500,000.00 | -$2,500,000.00 |
| Direct material | $1,387,500.00 | $0.00 | $1,387,500.00 |
| Direct Labor | $562,500.00 | $0.00 | $562,500.00 |
| Variable overhead | $150,000.00 | $0.00 | $150,000.00 |
| Supervisory Salary - Avoidable | $75,000.00 | $0.00 | $75,000.00 |
| Equipment Rent - Avoidable | $225,000.00 | $0.00 | $225,000.00 |
| Total cost | $2,400,000.00 | $2,500,000.00 | -$100,000.00 |
Add Answer to:
Check my work "In my opinion, we ought to stop making our own drums and accept...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $20 per drum, we would be paying $4.25 less than it costs us to manufacture the drums in our own plant. Since we use 75,000 drums a year, that would be an annual cost savings of $318,750." Antilles Refining's current cost to manufacture one drum is given below...
“In my opinion, we ought to stop making our own drums and accept that outside supplier’s...
“In my opinion, we ought to stop making our own drums and accept
that outside supplier’s offer,” said Wim Niewindt, managing
director of Antilles Refining, N.V., of Aruba. “At a price of $18
per drum, we would be paying $5 less than it costs us to
manufacture the drums in our own plant. Since we use 60,000 drums a
year, that would be an annual cost savings of $300,000.” Antilles
Refining’s current cost to manufacture one drum is given below...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $22 per drum, we would be paying $3.50 less than it costs us to manufacture the drums in our own plant. Since we use 95,000 drums a year, that would be an annual cost savings of $332,500." Antilles Refining's current cost to manufacture one drum is given below...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $22 per drum, we would be paying $3.50 less than it costs us to manufacture the drums in our own plant. Since we use 95,000 drums a year, that would be an annual cost savings of $332,500." Antilles Refining's current cost to manufacture one drum is given below...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $21 per drum, we would be paying $4.85 less than it costs us to manufacture the drums in our own plant. Since we use 50,000 drums a year, that would be an annual cost savings of $242,500." Antilles Refining's current cost to manufacture one drum is given below...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $18 per drum, we would be paying $5 less than it costs us to manufacture the drums in our own plant. Since we use 60,000 drums a year, that would be an annual cost savings of $300,000." Antilles Refining's current cost to manufacture one drum is given below...
Check my work "In my opinion, we ought to stop making our own drums and accept...
Check my work "In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V, of Aruba. "At a price of $21 per drum, we would be paying $7.05 less than it costs us to manufacture the drums in our own plant. Since we use 65,000 drums a year, that would be an annual cost savings of $458,250 Antilles Refining's current cost to manufacture one drum...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $18 per drum, we would be paying $6.65 less than it costs us to manufacture the drums in our own plant. Since we use 65,000 drums a year, that would be an annual cost savings of $432,250." Antilles Refining's current cost to manufacture one drum is given below...
“In my opinion, we ought to stop making our own drums and accept that outside supplier’s...
“In my opinion, we ought to stop making our own drums and accept that outside supplier’s offer,” said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. “At a price of $21 per drum, we would be paying $7.05 less than it costs us to manufacture the drums in our own plant. Since we use 65,000 drums a year, that would be an annual cost savings of $458,250.” Antilles Refining’s current cost to manufacture one drum is given below...
“In my opinion, we ought to stop making our own drums and accept that outside supplier’s...
“In my opinion, we ought to stop making our own drums and accept
that outside supplier’s offer,” said Wim Niewindt, managing
director of Antilles Refining, N.V., of Aruba. “At a price of $19
per drum, we would be paying $5.80 less than it costs us to
manufacture the drums in our own plant. Since we use 70,000 drums a
year, that would be an annual cost savings of $406,000.” Antilles
Refining’s current cost to manufacture one drum is given below...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $20 per drum, we would be paying $4.25 less than it costs us to manufacture the drums in our own plant. Since we use 75,000 drums a year, that would be an annual cost savings of $318,750." Antilles Refining's current cost to manufacture one drum is given below...
“In my opinion, we ought to stop making our own drums and accept
that outside supplier’s offer,” said Wim Niewindt, managing
director of Antilles Refining, N.V., of Aruba. “At a price of $18
per drum, we would be paying $5 less than it costs us to
manufacture the drums in our own plant. Since we use 60,000 drums a
year, that would be an annual cost savings of $300,000.” Antilles
Refining’s current cost to manufacture one drum is given below...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $22 per drum, we would be paying $3.50 less than it costs us to manufacture the drums in our own plant. Since we use 95,000 drums a year, that would be an annual cost savings of $332,500." Antilles Refining's current cost to manufacture one drum is given below...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $22 per drum, we would be paying $3.50 less than it costs us to manufacture the drums in our own plant. Since we use 95,000 drums a year, that would be an annual cost savings of $332,500." Antilles Refining's current cost to manufacture one drum is given below...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $21 per drum, we would be paying $4.85 less than it costs us to manufacture the drums in our own plant. Since we use 50,000 drums a year, that would be an annual cost savings of $242,500." Antilles Refining's current cost to manufacture one drum is given below...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $18 per drum, we would be paying $5 less than it costs us to manufacture the drums in our own plant. Since we use 60,000 drums a year, that would be an annual cost savings of $300,000." Antilles Refining's current cost to manufacture one drum is given below...
Check my work "In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V, of Aruba. "At a price of $21 per drum, we would be paying $7.05 less than it costs us to manufacture the drums in our own plant. Since we use 65,000 drums a year, that would be an annual cost savings of $458,250 Antilles Refining's current cost to manufacture one drum...
"In my opinion, we ought to stop making our own drums and accept that outside supplier's offer," said Wim Niewindt, managing director of Antilles Refining, N.V., of Aruba. "At a price of $18 per drum, we would be paying $6.65 less than it costs us to manufacture the drums in our own plant. Since we use 65,000 drums a year, that would be an annual cost savings of $432,250." Antilles Refining's current cost to manufacture one drum is given below...
“In my opinion, we ought to stop making our own drums and accept
that outside supplier’s offer,” said Wim Niewindt, managing
director of Antilles Refining, N.V., of Aruba. “At a price of $19
per drum, we would be paying $5.80 less than it costs us to
manufacture the drums in our own plant. Since we use 70,000 drums a
year, that would be an annual cost savings of $406,000.” Antilles
Refining’s current cost to manufacture one drum is given below...
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