utsourcing Dough, Re, Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or to outsource. If the company outsources, they will eliminate all of the variable overhead and 30% of the fixed manufacturing overhead, but will incur shipping costs. Use the information below to determine whether Dough, Re, Mi Inc. should outsource or not. Data Units Per unit Relevant? $ Sales price Direct materials per unit per unit 119.00 26.00 Direct labor per unit 18.00 Variable manufacturing overhead per unit 14.00 Fixed manufacturing overhead (MOH): per month 30.00 Avoidable fixed MOH per month Unavoidable fixed MOH per month Sales commissions per unit 3.00 Advertising costs per month 1.80 per unit Purchase price of outsourced product Shipping costs of outsourced product 59.00 1.00 per unit Costs per unit Incremental analysis Manufacture Variable costs Enter "=0" in the cell for any cost not relevant to the decision. Direct materials Direct labor Variable manufacturing overhead Purchase price Shipping costs Sales commissions Total variable costs Fixed costs Fixed manufacturing overhead Advertising Total fixed costs Incremental cost 5,450 Outsource

utsourcing Dough, Re, Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or to outsource. If the company outsources, they will eliminate all of the variable overhead and 30% of the fixed manufacturing overhead, but will incur shipping costs. Use the information below to determine whether Dough, Re, Mi Inc. should outsource or not. Data Units Per unit Relevant? $ Sales price Direct materials per unit per unit 119.00 26.00 Direct labor per unit 18.00 Variable manufacturing overhead per unit 14.00 Fixed manufacturing overhead (MOH): per month 30.00 Avoidable fixed MOH per month Unavoidable fixed MOH per month Sales commissions per unit 3.00 Advertising costs per month 1.80 per unit Purchase price of outsourced product Shipping costs of outsourced product 59.00 1.00 per unit Costs per unit Incremental analysis Manufacture Variable costs Enter "=0" in the cell for any cost not relevant to the decision. Direct materials Direct labor Variable manufacturing overhead Purchase price Shipping costs Sales commissions Total variable costs Fixed costs Fixed manufacturing overhead Advertising Total fixed costs Incremental cost 5,450 Outsource

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Description: OutsourcingDough, Re, Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or to outsource.If the company outsources, they will eliminate all of the variable overhead and 30% of the fix

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
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