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33 Make or Buy at Nantucket Nectars Assume that Nantucket Nectars reports the following costs to make 17.5 oz. bottles for its juice cocktails: Nantucket
33 Make or Buy at Nantucket Nectars Assume that Nantucket Nectars reports the following costs to make 17.5 oz. bottles for its juice cocktails: Nantucket Nectars Company Cost of Making 17.5-Ounce Bottles Direct materials Direct labor Variable factory overhead Fixed factory overhead Total Cost for 1,000,000 Bottles Cost per Bottle $ 80,000 5.080 30.000 030 60.000 060 85,000 085 $255,000 5.255 Total costs Another manufacturer offers to sell Nantucket Nectars the bottles for $.25. The capacity now used to make bottles will become idle if the company purchases the bottles. Further, one supervisor with a salary of $60,000, a fixed cost, would be eliminated if the bottles were purchased. Prepare a schedule that compares the costs to make and buy the 17.5 oz. bottles. Should Nantucket Nectars make or buy the bottles
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