Function: IF, SUM; Formula: Multiply; Cell Referencing BE5.5 - Using Excel to Evaluate a Make-Versus-Buy Decision PROBLEM Grunar Industries produces the component parts needed for its popular non-commercial-use drones. One of the key parts has become more costly to produce than first planned, however, so management is considering outsourcing that part. If the company decides not to manufacture this part, a portion of its fixed manufacturing overhead costs would continue. The costs to produce one such part internally and to purchase on part from the suppler are given here. Costs to produce internally Direct materials Direct labor Variable manufacturing overhead $ 2.80 1.70 0.50 Fixed manufacturing overhead 2.00 Cost to purchase from a supplier 6.25 Portion of fixed manufacturing cost to continue 80% Student Work Area Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated. Complete the schedule to support the decision of whether to make or buy the par Relevant Costs Relevant Cost to Make to Buy Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost Should Grunar continue to make the part or buy it from the supplier? Grunar should
Function: IF, SUM; Formula: Multiply; Cell Referencing BE5.5 - Using Excel to Evaluate a Make-Versus-Buy Decision PROBLEM Grunar Industries produces the component parts needed for its popular non-commercial-use drones. One of the key parts has become more costly to produce than first planned, however, so management is considering outsourcing that part. If the company decides not to manufacture this part, a portion of its fixed manufacturing overhead costs would continue. The costs to produce one such part internally and to purchase on part from the suppler are given here. Costs to produce internally Direct materials Direct labor Variable manufacturing overhead $ 2.80 1.70 0.50 Fixed manufacturing overhead 2.00 Cost to purchase from a supplier 6.25 Portion of fixed manufacturing cost to continue 80% Student Work Area Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated. Complete the schedule to support the decision of whether to make or buy the par Relevant Costs Relevant Cost to Make to Buy Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost Should Grunar continue to make the part or buy it from the supplier? Grunar should
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Function: IF, SUM; Formula: Multiply; Cell Referencing
BE5.5 - Using Excel to Evaluate a Make-Versus-Buy Decision
PROBLEM
Grunar Industries produces the component parts needed for its popular
non-commercial-use drones. One of the key parts has become more costly
to produce than first planned, however, so management is considering
outsourcing that part. If the company decides not to manufacture this part,
a portion of its fixed manufacturing overhead costs would continue. The
costs to produce one such part internally and to purchase on part from the
suppler are given here.
Costs to produce internally
Direct materials
Direct labor
Variable manufacturing overhead
$ 2.80
1.70
0.50
Fixed manufacturing overhead
2.00
Cost to purchase from a supplier
6.25
Portion of fixed manufacturing cost to continue
80%
Student Work Area
Required: Provide input into cells shaded in yellow in this template. Input the
required mathematical formulas or functions with cell references to the Problem
area or work area as indicated.
Complete the schedule to support the decision of whether to make or buy the par
Relevant Costs Relevant Cost
to Make
to Buy
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Total cost
Should Grunar continue to make the part or buy it from the supplier?
Grunar should
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