Marigoid, Inc. currently manufactures a wicket as its main product. The costs per unit are as follows: Direct materials and direct labor $11 Variable overhead Fixed overhead Total $24 Saran Company has contacted Marigold with an offer to sell it 5500 of the wickets for $18 each. If Marigold makes the wickets, variable costs $5 per unit is unavoidable. Should Marigold make or buy the wickets? Make; savings - $11000 Buy; savings - $16s00 Make; savings - $5500 Buy; savings - $5500
Marigoid, Inc. currently manufactures a wicket as its main product. The costs per unit are as follows: Direct materials and direct labor $11 Variable overhead Fixed overhead Total $24 Saran Company has contacted Marigold with an offer to sell it 5500 of the wickets for $18 each. If Marigold makes the wickets, variable costs $5 per unit is unavoidable. Should Marigold make or buy the wickets? Make; savings - $11000 Buy; savings - $16s00 Make; savings - $5500 Buy; savings - $5500
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 5P
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![Marigold, Inc. currently manufactures a wicket as its main product. The costs per unit are as follows:
Direct materials and direct labor
$11
Variable overhead
Fixed overhead
Total
$24
Saran Company has contacted Marigold with an offer to sell it 5500 of the wickets for $18 each. If Marigold makes the wickets, variable costs
$5 per unit is unavoidable. Should Marigold make or buy the wickets?
Make; savings - $11000
Buy; savings - $16s00
Make; savings = $5500
Buy; savings = $5500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F01fd6a3f-704e-42fc-ac1b-d0c9a0b582be%2F3068fd0f-8c9b-47fe-b6e8-aceeedd1a738%2Ffxjthzt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Marigold, Inc. currently manufactures a wicket as its main product. The costs per unit are as follows:
Direct materials and direct labor
$11
Variable overhead
Fixed overhead
Total
$24
Saran Company has contacted Marigold with an offer to sell it 5500 of the wickets for $18 each. If Marigold makes the wickets, variable costs
$5 per unit is unavoidable. Should Marigold make or buy the wickets?
Make; savings - $11000
Buy; savings - $16s00
Make; savings = $5500
Buy; savings = $5500
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