Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A jalapeno canning company is faced with a make/ buy decision. Cardboard shipping cartons can be purchased for 50.60 each or made in-house. If manufactured,

image text in transcribed

A jalapeno canning company is faced with a make/ buy decision. Cardboard shipping cartons can be purchased for 50.60 each or made in-house. If manufactured, two machines will be required. Machine X will cost $20,000 and have a life of 6 years with a 52000 salvage value. Machine Y will cost $11,000 and have a life of 4 years with no salvage value. The annual maintenance cost for machines X and Y are $6000 and $5000 per year, respectively. A total of four operators will be required for the two machines at a rate of $22.50 per hour per person. In a normal 8-hour day, the four operators and two machines can produce 1000 cartons. The variable cost per carton associated with the in-house option is closest to: (a) S0.0625 (b) $0.10 c) $0.72 (d) $0.81

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

b. Why were these values considered important?

Answered: 1 week ago