6-33 Make or Buy at Nantucket Nectars Assume that Nantucket Nectars reports the following costs to make 17.5 oz. bottles for its juice cocktails: Nantucket Nectars Company Cost of Making 17.5-Ounce Bottles Direct materials Direct labor Variable factory overhead Fixed factory overhead Total costs Total Cost for 1,000,000 Bottles Cost per Bottle $ 80,000 $.080 30,000 .030 60,000 .060 85,000 .085 $255,000 $.255 Another manufacturer offers to sell Nantucket Nectars the bottles for $.25. The capacity now used to make bottles will become idle if the company purchases the bottles. Further, one supervisor with a salary of $60,000, a fixed cost, would be eliminated if the bottles were purchased. Prepare a schedule that compares the costs to make and buy the 17.5 oz. bottles. Should Nantucket Nectars make or buy the bottles?

6-33 Make or Buy at Nantucket Nectars Assume that Nantucket Nectars reports the following costs to make 17.5 oz. bottles for its juice cocktails: Nantucket Nectars Company Cost of Making 17.5-Ounce Bottles Direct materials Direct labor Variable factory overhead Fixed factory overhead Total costs Total Cost for 1,000,000 Bottles Cost per Bottle $ 80,000 $.080 30,000 .030 60,000 .060 85,000 .085 $255,000 $.255 Another manufacturer offers to sell Nantucket Nectars the bottles for $.25. The capacity now used to make bottles will become idle if the company purchases the bottles. Further, one supervisor with a salary of $60,000, a fixed cost, would be eliminated if the bottles were purchased. Prepare a schedule that compares the costs to make and buy the 17.5 oz. bottles. Should Nantucket Nectars make or buy the bottles?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prime Cost and Conversion Cost Grin Company manufactures digital cameras. In January, Grin produced 3,750 cameras with the following costs: Direct materials $1,000,000 Direct labor 104,000 Manufacturing overhead 768,000 There were no beginning or ending inventories of WIP. Required: If required, round your answers to the nearest cent. 1. What was the total prime cost in January?$fill in the blank 1 2. What was the prime cost per unit in January?$fill in the blank 2per unit 3. What was the total conversion cost in January?$fill in the blank 3 4. What was the conversion cost per unit in January? $fill in the blank 4per unit