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One of the most popular phone accessory companies, Blossom, has a reputation for unique designs for its phone cases. Its cases fit any version of all the prominent manufacturers' phones. The competition in this market is becoming fierce, with phone manufacturers spending big money on their own accessories. Blossom is unsure if it should continue to manufacture the phone cases or outsource them to simplify operations. Manufacturing costs for Blossom are as follows; these costs support one cycle of production that yields 1,000 phone cases: DM DL Costs per Cycle to Make Variable-MOH (a) $10,500 Fixed-MOH (total) 77,000 4,500 If Blossom decides to purchase the cases, $65,700 of the fixed-MOH costs will be unavoidable. Price 3,000 $ Your answer is correct. At what price would Blossom be indifferent about making its own phone cases versus buying from a supplier? (Round answer to 2 decimal places, e.g. 15.25.) 29.30 per case

One of the most popular phone accessory companies, Blossom, has a reputation for unique designs for its phone cases. Its cases fit any version of all the prominent manufacturers' phones. The competition in this market is becoming fierce, with phone manufacturers spending big money on their own accessories. Blossom is unsure if it should continue to manufacture the phone cases or outsource them to simplify operations. Manufacturing costs for Blossom are as follows; these costs support one cycle of production that yields 1,000 phone cases: DM DL Costs per Cycle to Make Variable-MOH (a) $10,500 Fixed-MOH (total) 77,000 4,500 If Blossom decides to purchase the cases, $65,700 of the fixed-MOH costs will be unavoidable. Price 3,000 $ Your answer is correct. At what price would Blossom be indifferent about making its own phone cases versus buying from a supplier? (Round answer to 2 decimal places, e.g. 15.25.) 29.30 per case

FINANCIAL ACCOUNTING
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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One of the most popular phone accessory companies, Blossom, has a reputation for unique designs for its phone cases. Its cases fit any version of all the prominent manufacturers' phones. The competition in this market is becoming fierce, with phone manufacturers spending big money on their own accessories. Blossom is unsure if it should continue to manufacture the phone cases or outsource them to simplify operations. Manufacturing costs for Blossom are as follows; these costs support one cycle of production that yields 1,000 phone cases: DM DL Costs per Cycle to Make Variable-MOH Fixed-MOH (total) (a) $10,500 4,500 3,000 If Blossom decides to purchase the cases, $65,700 of the fixed-MOH costs will be unavoidable. Price $ 77,000 Your answer is correct. At what price would Blossom be indifferent about making its own phone cases versus buying from a supplier? (Round answer to 2 decimal places, e.g. 15.25.) 29.30 per case
Transcribed Image Text:One of the most popular phone accessory companies, Blossom, has a reputation for unique designs for its phone cases. Its cases fit any version of all the prominent manufacturers' phones. The competition in this market is becoming fierce, with phone manufacturers spending big money on their own accessories. Blossom is unsure if it should continue to manufacture the phone cases or outsource them to simplify operations. Manufacturing costs for Blossom are as follows; these costs support one cycle of production that yields 1,000 phone cases: DM DL Costs per Cycle to Make Variable-MOH Fixed-MOH (total) (a) $10,500 4,500 3,000 If Blossom decides to purchase the cases, $65,700 of the fixed-MOH costs will be unavoidable. Price $ 77,000 Your answer is correct. At what price would Blossom be indifferent about making its own phone cases versus buying from a supplier? (Round answer to 2 decimal places, e.g. 15.25.) 29.30 per case
(c) If Blossom could purchase similar quality phone cases from a supplier for $26 each, how much additional savings would it need to find in its fixed costs for this to be an equally attractive quantitative option? Additional savings eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer
Transcribed Image Text:(c) If Blossom could purchase similar quality phone cases from a supplier for $26 each, how much additional savings would it need to find in its fixed costs for this to be an equally attractive quantitative option? Additional savings eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer
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