P3. (make or buy) Sam Company incurs the following costs in producing 10,000 covers.Direct material costs$20,000Direct labor costs$50,000$30,000Variable manufacturing overheadFixed manufacturing overheadTotal manufactuing costs$40,000$140,000Manuafacturing costs/unit-$100,000/10,000 units $14MIf Sam buys them, the purchasing cost would be $ 12/unit, and Sam has to assume$26,000 of fixed manufacturing overhead.Instruction) Prepare an analysis showing Sam should make or buy the covers. Andprovide a recommendation.P4. (cost-plus pricing) Sam corporation produces air purifiers. The following per unit costinformation is available: direct materials $10, direct labor $20, variable manufacturing overhead$25, variable selling and administrative expenses $15. Fixed selling and administrative expensesare $200,000, and fixed manufacturing overhead is $100,000.Instructions:1. Using a 40% markup pefcentage on the total cost per unit and assuming 10,000 units,compute the target selling price.2. Using a 50% markup percentage on the total cost per unit and assuming 20,000 units,compute the target selling price.

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P3. (make or buy) Sam Company incurs the following costs in producing 10,000 covers. $20,000 Direct material costs Direct labor costs $50,000 $30,000 Variable manufacturing overhead Fixed manufacturing overhead Total manufactuirng costs $40,000 $140,000 Manuafacturing costs/unit-$100,000/10,000 units - $14 If Sam buys them, the purchasing cost would be $ 12/unit, and Sam has to assume $26,000 of fixed manufacturing overhead. Instruction) Prepare an analysis showing Sam should make or buy the covers. And provide a recommendation.

P3. (make or buy) Sam Company incurs the following costs in producing 10,000 covers. $20,000 Direct material costs Direct labor costs $50,000 $30,000 Variable manufacturing overhead Fixed manufacturing overhead Total manufactuirng costs $40,000 $140,000 Manuafacturing costs/unit-$100,000/10,000 units - $14 If Sam buys them, the purchasing cost would be $ 12/unit, and Sam has to assume $26,000 of fixed manufacturing overhead. Instruction) Prepare an analysis showing Sam should make or buy the covers. And provide a recommendation.

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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