Question: 1 . If Silven buys its tubes from the outside supplier, how much of its own Chap - Off manufacturing costs per box will it

1. If Silven buys its tubes from the outside supplier, how much of its own Chap-Off manufacturing costs per box will it be able to avoid?
(Hint: You need to separate the manufacturing overhead of $1.60 per box that is shown above into its variable and fixed components to derive the correct answer.)
2. What is the financial advantage (disadvantage) per box of Chap-Off if Silven buys its tubes from the outside supplier?
3. What is the financial advantage (disadvantage) in total (not per box) if Silven buys 140,000 boxes of tubes from the outside supplier?
4. Should Silven Industries make or buy the tubes?
5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes?
6. Instead of sales of 140,000 boxes of tubes, revised estimates show a sales volume of 173,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $53,000 per year to make the additional 33,000 boxes of tubes.
Assuming that the outside supplier will not accept an order for less than 173,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 173,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes?
7. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes'at a price of $1.20 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier?
 1. If Silven buys its tubes from the outside supplier, how

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!