(Click the icon to view the make-versus-buy information.) The Swanson Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information about the costs of making CMCBs in 2017 and the expected costs in 2018: (Click the icon to view the costs.) Read the requirements * Requirements Requirement 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2018. Total Manufacturing Costs of CMCB Manufacturing Cost per Unit Direct materials Direct manufacturing labor Variable batch manufacturing costs Fixed manufacturing costs Avoidable fixed manufacturing costs Unavoidable fixed manufacturing costs 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2018. Suppose the capacity currently used to make CMCBs will become idle if Swanson purchases CMCBs from Manson. On the basis of financial considerations alone, should Swanson make CMCBs or buy them from Manson? Show your calculations. 3. Now suppose that if Swanson purchases CMCBs from Manson, its best alternative use of the capacity currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Everyday Corporation. Swanson estimates the following incremental revenues and costs from CB3s: Total expected incremental future revenues $2,200,000 Total expected incremental future costs $2,375,000 On the basis of financial considerations alone, should Swanson make CMCBs or buy them from Manson? Show your calculations. Total manufacturing costs 1 Data Table - X Print Done Current Costs in 2017 Expected Costs in 2018 195 $ 185 1,800 1,500 Variable manufacturing costs Direct material cost per CMCB Direct manufacturing labor cost per CMCB Variable manufacturing cost per batch for setups, materials handling, and quality control Fixed manufacturing cost Fixed manufacturing overhead costs that can be avoided if CMCBs are not made Fixed manufacturing overhead costs of plant depreciation, insurance, and administration that cannot be avoided even if CMCBs are not made 300,000 720,000 Enter any number in the edit fields and then click Check Answer. 700,000 450,000 (Click the icon to view the make-versus-buy information.) The Swanson Corporation manufactures cellular modems. It manufactures its own cellular modem circuit boards (CMCB), an important part of the cellular modem. It reports the following cost information about the costs of making CMCBs in 2017 and the expected costs in 2018: (Click the icon to view the costs.) Read the requirements * Requirements Requirement 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2018. Total Manufacturing Costs of CMCB Manufacturing Cost per Unit Direct materials Direct manufacturing labor Variable batch manufacturing costs Fixed manufacturing costs Avoidable fixed manufacturing costs Unavoidable fixed manufacturing costs 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2018. Suppose the capacity currently used to make CMCBs will become idle if Swanson purchases CMCBs from Manson. On the basis of financial considerations alone, should Swanson make CMCBs or buy them from Manson? Show your calculations. 3. Now suppose that if Swanson purchases CMCBs from Manson, its best alternative use of the capacity currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Everyday Corporation. Swanson estimates the following incremental revenues and costs from CB3s: Total expected incremental future revenues $2,200,000 Total expected incremental future costs $2,375,000 On the basis of financial considerations alone, should Swanson make CMCBs or buy them from Manson? Show your calculations. Total manufacturing costs 1 Data Table - X Print Done Current Costs in 2017 Expected Costs in 2018 195 $ 185 1,800 1,500 Variable manufacturing costs Direct material cost per CMCB Direct manufacturing labor cost per CMCB Variable manufacturing cost per batch for setups, materials handling, and quality control Fixed manufacturing cost Fixed manufacturing overhead costs that can be avoided if CMCBs are not made Fixed manufacturing overhead costs of plant depreciation, insurance, and administration that cannot be avoided even if CMCBs are not made 300,000 720,000 Enter any number in the edit fields and then click Check Answer. 700,000 450,000
