Current Attempt in Progress

Crane 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 $56\%$ 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 of $$13\mathrm{.}30$ per unit. If Crane Ranch accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $$47,500$ of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products.

$($a$)$

Prepare the incremental analysis for the decision to make or buy the finials. $($Enter negative amounts using either a negative sign preceding the number e$.-45$ or parentheses e$..(45).)$

Prepare the incremental analysis for the decision to make or buy the finials. $($Enter negative amounts using either a negative sign preceding the number e$.$g$.45$ or parentheses e$.$g$.(45).)$

$($b$)$

Should Crane Ranch buy the finials?

$,$ Crane Ranch should the finials.

$($c$)$

Would your answer be different in $($b$)$ if the productive capacity released by not making the finials could be used to produce income of $$54,900?$

income would by $

eTextbook and Media

Save for Later