Circuits, he, manfactures a variety of residentid and commerclal Vacums. The CB50 is one d Circuits most popular Vacuums. Circuts has forecasted demand of 20 thousand CB5O Vacuums in the coming year. The company currently mandactures 10,000 units of CB50 and is ruming at two-thirds of its manufacturing capacity, with the potential to run at full capacity. The current fixed costs allocatod to this production line is $100,000. The compary has looked into the possibility of purchasing the CB5O's from ancther manufacturer to heip it meet this demand. Zack Products, a steady supplier of quality products, would be able to provide up b 9,000 C850s per year at a price of $46,00 per Vacuum. delivered to Circuits' facility. For each CB50 that Circults seils, regardess of whether the Vacum was purchased from Zack cr was manufactured by Circults, there is an add sional selling and administrative cost of $50,00, which includes (at a sales level of 10,000 units) an allocated $6,00 of fixed cost per unit. Required: For each of the required below, please clearly show all working format statements, and anelysis and label each number. Showing rumbers ONLY are not sufficiert: 1. What is the rolevart per-unit cost to Circults for producing Vacums internaly (Round answer bo two decimal plices) 2. Basod on next yoa's demand a 20,000 unis, how mary uns should the compary manutacture, and how many units (if any) should it purchase from Zack Products? Assume that the variatie selling and administrative expense will be incurred for all sales. Explain your reasoning. Under this odimum plan whyt is te total cortribution margin? Nole: Reauired 3 is indesondent of Requiremert 2 3. Amande Adams, Circults product manager has teen evaluafing new product irvoductions besed on demand and the skilis of the workforce. Amanda has sugpested the the compery could make betor use of is Vacuum department capacity by manufacturing marine whether Vocuums or marine pumes ave producod? Circuits, he, manfactures a variety of residentid and commerclal Vacums. The CB50 is one d Circuits most popular Vacuums. Circuts has forecasted demand of 20 thousand CB5O Vacuums in the coming year. The company currently mandactures 10,000 units of CB50 and is ruming at two-thirds of its manufacturing capacity, with the potential to run at full capacity. The current fixed costs allocatod to this production line is $100,000. The compary has looked into the possibility of purchasing the CB5O's from ancther manufacturer to heip it meet this demand. Zack Products, a steady supplier of quality products, would be able to provide up b 9,000 C850s per year at a price of $46,00 per Vacuum. delivered to Circuits' facility. For each CB50 that Circults seils, regardess of whether the Vacum was purchased from Zack cr was manufactured by Circults, there is an add sional selling and administrative cost of $50,00, which includes (at a sales level of 10,000 units) an allocated $6,00 of fixed cost per unit. Required: For each of the required below, please clearly show all working format statements, and anelysis and label each number. Showing rumbers ONLY are not sufficiert: 1. What is the rolevart per-unit cost to Circults for producing Vacums internaly (Round answer bo two decimal plices) 2. Basod on next yoa's demand a 20,000 unis, how mary uns should the compary manutacture, and how many units (if any) should it purchase from Zack Products? Assume that the variatie selling and administrative expense will be incurred for all sales. Explain your reasoning. Under this odimum plan whyt is te total cortribution margin? Nole: Reauired 3 is indesondent of Requiremert 2 3. Amande Adams, Circults product manager has teen evaluafing new product irvoductions besed on demand and the skilis of the workforce. Amanda has sugpested the the compery could make betor use of is Vacuum department capacity by manufacturing marine whether Vocuums or marine pumes ave producod
