Exercise 20- Anna Garden recently opened her own basketweaving studio. She sells

Question

Exercise 20- Anna Garden recently opened her own basketweaving studio. She sells finished baskets in addition to the raw materials needed by customers to weave baskets of their own. Anna has put together a variety of raw material kits, each including materials at various stages of completion. Unfortunately, owing to space limitations, Anna is unable to carry all varieties of kits originally assembled and must choose between two basic packages. The basic introductory kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basic package costs Anna $12 and sells for $27. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit the customer need only soak the reeds and weave the basket. Anna is able to produce the second kit by using the basic materials included in the first kit and adding one hour of her own time, which she values at $22 per hour. Because she is more efficient at cutting and dying reeds than her average customer, Anna is able to make two kits of the dyed reeds, in one hour, from one kit of undyed reeds. The Stage 2 kit sells for $35 Prepare an incremental analysis for the Anna's basketweaving studio. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sell (Basic Kit) Net Income Increase (Decrease) Process Further (Stage 2 Kit) Sales per unit Costs per unit Direct materials Direct labor Total Net income per unit LINK TO TEXT Should Anna's carry the basic introductory kit with undyed and uncut reeds or the Stage 2 kit with reeds already dyed and cut? Anna should carry the Click if you would like to Show Work for this question Show LINK TO TEXT Question Attempts: 0 of 2 used SAVE FOR LATER SUBMIT ANSWER

Explanation / Answer

Part 1

Part 2

Anna should carry the Stage 2 kits. (as there is increase in income)

Sell (basic kit) process further (stage 2 kit) net income increase (decrease) Sales price per unit 27 35 8 Cost per unit Direct materials 12 6 6 Direct labor - 11 (11) Total cost 12 17 (5) Net income per unit 15 18 3

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.