Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $164 per unit (100 bottles), including fixed costs of $31 per unit. A proposal is offere purchase small bottles from an outside source for $99 per unit, plus $12 per unit for freight. a. Prepare a differential analysis dated January 25 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make Buy Differential Bottles Effect (Alternative 1) (Alternative 2) (Alternative 2) Bottles Unit costs: Purchase price Freight Variablelcosts Fixed factory overhead Total unit costs b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.

Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $164 per unit (100 bottles), including fixed costs of $31 per unit. A proposal is offere purchase small bottles from an outside source for $99 per unit, plus $12 per unit for freight. a. Prepare a differential analysis dated January 25 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 Make Buy Differential Bottles Effect (Alternative 1) (Alternative 2) (Alternative 2) Bottles Unit costs: Purchase price Freight Variablelcosts Fixed factory overhead Total unit costs b. Determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Make or Buy A company manufactures various sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $56 per unit (100 bottles), including fixed costs of $18 per unit. A proposal is offered to purchase small bottles from an outside source for $29 per unit, plus $4 per unit for freight. Prepare a differential analysis dated March 30 to determine whether the company should Make Bottles (Alternative 1) or Buy Bottles (Alternative 2), assuming that fixed costs are unaffected by the decision. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) March 30 Make Buy Differential Bottles Bottles Effect (Alternative 1) (Alternative 2) (Alternative 2) Unit Costs: Purchase price Freight Variable costs Fixed factory overhead Total unit costs Determine whether the company should make (Alternative 1) or buy (Alternative 2) the…
Sell or Process Further Calgary Lumber Company incurs a cost of $388 per hundred board feet (hbf) in processing certain “rough-cut” lumber, which it sells for $550 per hbf. An alternative is to produce a “finished cut” at a total processing cost of $520 per hbf, which can be sold for $748 per hbf. a. Prepare a differential analysis dated March 15, on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Differential Analysis Sell Rough-Cut (Alt. 1) or Process Further into Finished-Cut (Alt. 2) March 15 Sell Rough-Cut(Alternative 1) Process Furtherinto Finished-Cut(Alternative 2) DifferentialEffect on Income(Alternative 2) Revenues, per unit $fill in the blank f0f0a4fd6062f85_1 $fill in the blank f0f0a4fd6062f85_2 $fill in the blank f0f0a4fd6062f85_3 Costs, per unit fill in the blank f0f0a4fd6062f85_4 fill in the blank f0f0a4fd6062f85_5 fill in the blank f0f0a4fd6062f85_6 Income (Loss), per unit $fill in…
sasa
None
Sell or Process Further Port Allen Chemical Company processes raw material D into joint products E and F. Raw material D costs $6 per liter. It costs $100 to convert 100 liters of D into 60 liters of E and 40 liters of F. Product F can be sold immediately for $6 per liter or processed further into Product G at an additional cost of $4 per liter. Product G can then be sold for $14 per liter. Determine whether Product F should be sold or processed further into Product G. • Calculate the net advantage (disadvantage) of further processing • Use a negative sign with your answer to indicate a net disadvantage (if applicable). $0 per liter
Vikarmbhai
Make or Buy A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $156 per unit (100 bottles), including fixed costs of $35 per unit. A proposal is offered to purchase small bottles from an outside source for $104 per unit, plus $8 per unit for freight. a. Prepare a differential analysis dated January 25 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the bottles, assuming fixed costs are unaffected by the decision. If an amount is zero, enter "0". Differential Analysis Make Bottles (Alt. 1) or Buy Bottles (Alt. 2) January 25 MakeBottles(Alternative 1) BuyBottles(Alternative 2) DifferentialEffect(Alternative 2) Unit costs: Purchase price $fill in the blank 54430b055ff4071_1 $fill in the blank 54430b055ff4071_2 $fill in the blank 54430b055ff4071_3 Freight fill in the blank 54430b055ff4071_4 fill in the blank 54430b055ff4071_5 fill in the blank…
Oficina Bonita Company manufactures office furniture. An unfinished desk is produced for $34.75 and sold for $65.75. A finished desk can be sold for $75.50. The additional processing cost to complete the finished desk is $6.45. Prepare a differential analysis. Round your answers to two decimal places. Line Item Description Sell UnfinishedDesks(Alternative 1) Process Further intoFinished Desks(Alternative 2) DifferentialEffects(Alternative 2) Revenues per desk $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Costs per desk fill in the blank 4 fill in the blank 5 fill in the blank 6 Profit (loss) per desk $fill in the blank 7 $fill in the blank 8 $fill in the blank 9 Should the company sell unfinished desks or process further and sell finished desks?Oficina Bonita Company should .
Process or Sell Product A is produced for $3.38 per pound. Product A can be sold without additional processing for $4.21 per pound or processed further into Product B at an additional cost of $0.35 per pound. Product B can be sold for $4.36 per pound Prepare a differential analysis dated November 15 on whether to sell A (Alternative 1) or process further into B (Alternative 2). If required, round your answers to the nearest whole dollar. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Product A (Alt. 1) or Process Further into Product B (Alt. 2) November 15 Process Further into Product B(Alternative 2) Differential Effect Sell Product A (Alternative 1) on Income (Alternative 2) $1 Revenues, per unit Costs, per unit Income (Loss), per unit Should Product A be sold (Alternative 1) or processed further into Product B (Alternative 2)? Sell Product A Process further into Product B
Process or Sell Product P is produced for $31 per gallon. Product P can be sold without additional processing for $47 per gallon or processed further into Product Q at an additional cost of $7 per gallon. Product Q can be sold for $50 per gallon. Prepare a differential analysis dated February 26 on whether to Sell Product P (Alternative 1) or Process Further into Product Q (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Product P (Alt. 1) or Process Further into Product Q (Alt. 2) February 26 Process Further Sell Differential into Product Q Product P Effect (Alternative 2) (Alternative 1) (Alternative 2) Revenues, per unit $ Costs, per unit Profit (loss), per unit Should Product P be sold (Alternative 1) or processed further into Product Q (Alternative 2)?
Sell or Process Further Jackson Lumber Company incurs a cost of $374 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $546 per hbf. An alternative is to produce a "finished cut" at a total processing cost of $529 per hbf, which can be sold for $746 per hbf. Prepare a differential analysis dated August 9 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Sell Rough-Cut (Alt. 1) or Process Further into Finished Cut (Alt. 2) August 9 Revenues, per 100 board ft. Costs, per 100 board ft. Income (Loss), per 100 board ft. Sell Rough-Cut (Alternative 1) $ Process Further into Finished Cut (Alternative 2) Differential Effect on Income (Alternative 2) 4 Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Process…
Product F is produced for $3.42 per pound. Product F can be sold without additional processing for $4.07 per pound or processed further into Product G at an additional cost of $0.43 per pound. Product G can be sold for $4.42 per pound. Prepare a differential analysis dated November 15 on whether to Sell Product F (Alternative 1) or Process Further into Product G (Alternative 2). If required, round your answer to the nearest cent. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential AnalysisSell Product F (Alt. 1) or Process Further into Product G (Alt. 2)November 15 SellProduct F(Alternative 1) ProcessFurther intoProduct G(Alternative 2) DifferentialEffect(Alternative 2) Revenues, per unit $fill in the blank 15afe8f7b050fa7_1 $fill in the blank 15afe8f7b050fa7_2 $fill in the blank 15afe8f7b050fa7_3 Costs, per unit fill in the blank 15afe8f7b050fa7_4 fill in the blank 15afe8f7b050fa7_5 fill in the blank 15afe8f7b050fa7_6…