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Blossom Ranch Inc has been manufacturing its own finials for its curtain rods, The company is currently operating at 100:k of capacity and variable manufacturing
Blossom Ranch Inc has been manufacturing its own finials for its curtain rods, The company is currently operating at 100:k of capacity and variable manufacturing overhead is charged to production at the rate of 68% of direct labor cost. The direct materfats and direet labor cost per unit to make a pair of finlals are $4 and $5, respectively. Normal production is 25,300 curtain rods per year, A supplier offers to make a pair of finials at a price of $12.95 per unit. If Blossom Ranch sccepts the supplier's olfer, all variable manufacturing costs will be eliminated, but the $46,400 of fixed manufacturing overhead currently being charged to the finials will huve to be absorbed by other products. (a) Prepare the incremental analysis for the decision to make or buy the finials. (Enter negotive amounts using either a negotive sigs preceding the number es -45 or parentheses es. (45) Prepare the incremental analysis for the decision to make or buy the finials. (Enter negative amounts using elther a negotive sign precedirg the number es 45 or parentheses 8 . (45).) (b) Should Eiostom Ranch buy the finials? , Elossom Ranch should the finials. (c) Would your answer be different in (b) if the productive capactiv released by not makine the finiab could be used to produce income of $18,400? incorne would bys
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