Question: A company manufactures various sized plastic bottles for its medicinal
A company manufactures various sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $ 67 per unit (100 bottles), including fixed costs of $ 22 per unit. A proposal is offered to purchase small bottles from an outside source for $ 35 per unit, plus $ 5 per unit for freight. Prepare a differential analysis dated March 30, 2014, to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision.
Answer to relevant QuestionsA machine with a book value of $ 126,000 has an estimated six- year life. A proposal is offered to sell the old machine for $ 98,000 and replace it with a new machine at a cost of $ 155,000. The new machine has a six-year ...Product A is normally sold for $ 9.60 per unit. A special price of $ 7.20 is offered for the export market. The variable production cost is $ 5.00 per unit. An additional export tariff of 15% of revenue must be paid for all ...The condensed product- line income statement for Dish N’ Dat Company for the month of March is as follows:Fixed costs are 15% of the cost of goods sold and 40% of the selling and administrative expenses. Dish N’ Dat ...Homestead Jeans Co. has an annual plant capacity of 65,000 units, and current production is 45,000 units. Monthly fixed costs are $ 54,000, and variable costs are $ 29 per unit. The present selling price is $ 42 per unit. On ...Based on the data presented in Exercise assume that Smart Stream Inc. uses the variable cost concept of applying the cost- plus approach to product pricing. In Exercise, Smart Stream Inc. uses the product cost concept of ...
Post your question