Question: this is all one question, please help! Siven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided








Siven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin Atter considerable research, a winter products line has been developed However, Silven's president has decided to introduce only one of the new products for this coming winter if the product is a success, further expansion in future years will be initiated The product selected (called Chap-Oin) is a lip baim that will be sold in a lipstick-type tube. The product will be sold to wholesalers in boxes of 24 tubes for $11 per box. Because of excess capacity, no additional fixed manufacturing overhead costs will be incurted to produce the product However, a $94,500 charge for fixed manufacturing overhead will be absorbed by the product under the company's absorption costing system Using the estimated sales and production of 105,000 boves of Chap-Off, the Accounting Department has developed the following manufecturing cost per box: The costs above relate to making both the lip baim and the tube that contains it. As an altemative to making the tubes for Chap-Off, Silven has approached a supplier to discuss the possibility of buying the tubes. The purchase price of the suppller's empty tubes would be $200 per box of 24 tubes. If Silven industiles stops making the tubes and buys them from the outside supplier, its direct labor and varlable manufacturing overhead costs per box of Chap-Off would be reduced by 10% and its direct materials costs would be reduced by 30% Required: 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 $2.00 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 finencial advantage (disadvantage) in total (not per box) if Silven buys 105,000 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 wiling to pity the outside supplier for a box of 24 tubes? 6 . Instead of sales of 105,000 boxes of tubes, revised estimates show a sales volume of 131,000 boves of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $46,000 per year to make the additional 26,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 131,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 131,000 boxes of tubes from the outside suppller? Given this new information, should Siven Industries make or buy the tubes? 7. Refer to the dato in Required 6 . Assume that the outside supplier will accept an order of any size for the tubes of a price of 3200 per box. How many boxes of tubes should Siven make? How many boxes of tubes should it buy from the outside supplien? Complete this question by entering your answers in the tabs below. 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 $2.00 per box that is shown above into its variable and fixed components to derive the correct answer.) (Do not round intermediate calculations. Round your answer to 2 decimal Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) per box of Chap-Off if Silven buys its tubes from the outside supplier? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) in total (not per box) if Silven buys 105,000 boxes of tubes from the outside supplier? Complete this question by entering your answers in the tabs below. Should Silven Industries make or buy the tubes? Complete this question by entering your answers in the tabs below. What is the maximum price that Silven should be willing to pay tside supplier for a bax of 24 bubes? (0e net round intermediate calculations. Round your answer to 2 decimal places.) Complete this question by entering your answers in the tabs below. Instead of sales of 105,000 boxes of tubes, revised estimates show a sales volume of 131,000 boves of tubes At this higher sales volume, Silven would need to rent extre equipment at a cost of $46,000 per year to make the additional 26,000 boves of tubes. Assuming that the outside supplier will not accept an order for less than 131,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven burs 131,000 boxes of tubes from the outside supplier? Given this new information, should Silven industries make or buy the tubes? Complete this question by entering your answers in the tabs below. Refer to the data in Required 6 . Assume that the outside supplier will accept an order of ary size for the hubes at a price of $2.00 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? (Round your intermediate calculations to 2 decimal places.)
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