C Solved: Make X 201810-Spring Chapter 12 HoXD ( Ashley ... € C M Inbox (11,188)
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C Solved: Make X 201810-Spring Chapter 12 HoXD ( Ashley ... € C M Inbox (11,188) X Sy expand In / x C (a) How Long x T Hawkes Leamix 201810-Spring x O Not Secure ezto.mheducation.com/hm.tpx?_=0.71217760578708271524193877695 Silven 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. After 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-Off) is a lip balm that will be sold in a lipstick-type tube. The product will be sold to wholesalers in boxes of 14 tubes for $8.00 per box. Because of excess capacity, no additional fixed manufacturing overhead costs will be incurred to produce the product. However, a $110,000 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 100,000 boxes of Chap-Off, the Accounting Department has developed the following cost per box: Direct materials Direct labor Manufacturing overhead $3.70 1.00 1.90 Total cost $6.60 The costs above include costs for producing both the lip balm and the tube that contains it. As an alternative to making the tubos, Silven has approached a supplier to discuss the possibility of purchasing the tubes for Chap-Ofr. The purchase price of the empty tubes from the supplier would be $1.20 per box of 14 tubes. If Silven Industries accepts the purchase proposal, direct labor and variable manufacturing overhead costs per box of Chap-Off would be reduced by 10% and direct materials costs would be reduced by 20%. Required: 1a. Calculate the total variable cost of producing one box of Chap-Off? (Round your intermediate calculations and final answer to 2 decimal places.) Total variable cost per box javascript:: Spring 2018 Syllabu....doc ... Sample Questions ....docx - Sample Questions ....docx S FTF_2018-04-17_152....pdf " Show All XExplanation / Answer
1.a.
Working:
1.b.
Working:
1.c. MAKE
The incremental cost of making a box of tubes is $0.92, which is less than the cost of buying of $1.20 per box, The company shoul make the tubes.
2.
The maximum purchase price is $0.92 per box.
Total variable cost $5.50
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