Golfers, Inc. (Gl) manufactures golf-related equipment including golf balls. This year's expected production of golf balls is 80,000 packs (each consisting of four golf balls). Cost data are as follows: Product costs directly traceable to balls: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead General allocated overhead Packs $2.30 $184,000 1.20 0.25 96,000 20,000 40,800 21,600 $362,400 The full cost of one pack of golf balls is $4.53. Gl has received an offer from an outside supplier to supply any desired quantity of balls at a price of $5.45 per pack of four golf balls. The cost accounting department has provided the following information: a. The direct fixed manufacturing overhead is the cost of leasing the machine that stamps out the balls. The machine can produce a maximum of 500,000 balls per year. If the balls are bought, the machine will no longer be needed. b. No other costs will be affected. Required: 1. Prepare an analysis showing whether GI would be better off making or buying the balls at a projected volume of 80,000 packs 320,000 golf balls). (Round "Per Unit" answers to 2 decimal places.)

Golfers, Inc. (Gl) manufactures golf-related equipment including golf balls. This year's expected production of golf balls is 80,000 packs (each consisting of four golf balls). Cost data are as follows: Product costs directly traceable to balls: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead General allocated overhead Packs $2.30 $184,000 1.20 0.25 96,000 20,000 40,800 21,600 $362,400 The full cost of one pack of golf balls is $4.53. Gl has received an offer from an outside supplier to supply any desired quantity of balls at a price of $5.45 per pack of four golf balls. The cost accounting department has provided the following information: a. The direct fixed manufacturing overhead is the cost of leasing the machine that stamps out the balls. The machine can produce a maximum of 500,000 balls per year. If the balls are bought, the machine will no longer be needed. b. No other costs will be affected. Required: 1. Prepare an analysis showing whether GI would be better off making or buying the balls at a projected volume of 80,000 packs 320,000 golf balls). (Round "Per Unit" answers to 2 decimal places.)

Name: Golfers, Inc. (Gl) manufactures golf-related equipment including golf
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Description: Golfers, Inc. (Gl) manufactures golf-related equipment including golf balls. This year's expected production of golf balls is 80,000 packs(each consisting of four golf balls). Cost data are as follows:Product costs directly traceable to balls!Direct

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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Subject: Acounting