Question
Carolina manufactures an AC unit called GB231. Variable manufacturing costs per unit of GB231 are as follows: Direct materials $23.22 Direct labor $15.50 Variable manufacturing
Carolina manufactures an AC unit called GB231. Variable manufacturing costs per unit of GB231 are as follows:
Direct materials | $23.22 |
Direct labor | $15.50 |
Variable manufacturing overhead | $7.53 |
The Wood Company has offered to sell Carolina 6,500 units of GB231 for $37.80 per unit. If Carolina accepts the offer, $65,000 of fixed manufacturing overhead will be eliminated.
Applying differential analysis to the situation, what should Carolina do? |
a. Calculate whether the outsourcing will be a savings or cost more.
Round to 0 decimals. If outsourcing is more than manufacturing, the amount should be entered with a negative(-)
b. Make or Buy? enter Make or Buy
Carolina manufactures an AC unit called GB231. Variable manufacturing costs per unit of GB231 are as follows:
Direct materials | $23.22 |
Direct labor | $15.50 |
Variable manufacturing overhead | $7.53 |
The Wood Company has offered to sell Carolina 6,500 units of GB231 for $37.80 per unit. If Carolina accepts the offer, $65,000 of fixed manufacturing overhead will be eliminated.
Applying differential analysis to the situation, what should Carolina do? |
a. Calculate whether the outsourcing will be a savings or cost more.
Round to 0 decimals. If outsourcing is more than manufacturing, the amount should be entered with a negative(-)
b. Make or Buy? enter Make or Buy
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started