Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Could you please solve the following questions? Thanks! 3 Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents,

Could you please solve the following questions? Thanks!

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
3 Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. 12 After considerable research, a winter products line has been developed. However, Silven's president has decided to points introduce only one of the new products for this coming winter. If the product is a success, further expansion in future years will be initiated. Skipped The product selected (called Chap-Off) is a lip balm that will be sold in a lipstick-type tube. The product will be sold to wholesalers in boxes of 24 tubes for $12 per box. Because of excess capacity, no additional fixed manufacturing eBook overhead costs will be incurred to produce the product. However, a $103,500 charge for fixed manufacturing overhead will be absorbed by the product under the company's absorption costing system. Print Using the estimated sales and production of 115,000 boxes of Chap-Off, the Accounting Department has developed the References following manufacturing cost per box: Direct material $ 5.20 Direct labor 3.60 Manufacturing overhead 2.20 Total cost $11 . 00 The costs above relate to making both the lip balm and the tube that contains it. As an alternative to making the tubes for Chap-Off, Silven has approached a supplier to discuss the possibility of buying the tubes. The purchase price of the supplier's empty tubes would be $1.90 per box of 24 tubes. If Silven Industries stops making the tubes and buys them from the outside sunnlier its direct labor and variable manufacturing overhead costs ner hoy of Chan-Off would he Mc12 points Shipped eBo-ok Prlnt References from the outside supplier, its direct labor and variable manufacturing overhead costs per box of Chap-Offwouid be reduced by 10% and its direct materials costs would be reduced by 25%. Required: 1. If Silven buys its tubes from the outside supplier. how much of its own Chap-Off manufacturing costs per box will it be able to avoid? {Hint You need to separate the manufacturing overhead of $2.20 per box that is shown above into its variable and xed components to derive the correct answer} 2. What is the financial advantage [disadvantage] per box of Chap-Off if Silven buys its tubes from the outside supplier? 3. What is the nancial advantage (disadva ntag e} in total [not per box} if Silven buys 115,000 boxes of tubes from the outside supplier? 4. Should Silven Industries make or buy the tubes? 5. What is the maximum price that Silven should be willing to pay:r the outside supplier for a box of 24 tubes? 6. Instead of sales of 115,000 boxes of to bes, revised estimates show a sales volume of 143,000 boxes of tubes. At this higher sales volume. Silven would need to rent extra equipment at a cost of $48,000 per year to make the additional 28,000 boxes of tu bes. Assuming that the outside supplier will not accept an order for less than 143,000 boxes of tubes. what is the nancial advantage (disadvantage) in total [not per box} if Silven buys 143,000 boxes of tubes from the outside supplier? Given this new information. should Silven Industries make or buy the tubes? '2'. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.90 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? Complete this question by entering your answers In the tabs below. Req 1 Req 2 Req 3 Req 4 Reg 5 Req 6 Req 1' Complete this question by entering your answers in the tabs below. 12 points Req 1 Req 2 Req 3 Reg 4 Req 5 Req 6 Req 7 Skipped Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.90 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? (Round your intermediate calculations to 2 decimal places.) eBook Print Number of boxes of tubes manufactured by Silven References Number of boxes of tubes purchased from the outside supplier 3 points Shipped eBook Prim References uuwluu nary-n... . Corn plate this quason by entering your answers In the tails below. If Sliven buys lis tubes from the outside supplier, how much of I15 own Chap-Off manufacturing oasis per box will It be able to avoid? {Hint: You need to separate 1e manufacturing overhead of $2.20 per box 1at ls shown above Into its variable and xed oomponenis to derive the correct answer.) (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Show less; 3 outside supplier? Complete this question by entering your answers in the tabs below. 12 points Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Reg 7 Skipped What is the financial advantage (disadvantage) per box of Chap-Off if Silven buys its tubes from the outside supplier? (Do not round intermediate calculations. Round your answer to 2 decimal places.) eBook per box Print References Req 1 Req 3 >3 outside supplier? Complete this question by entering your answers in the tabs below. 12 points Req 1 Req 2 Req 3 Req 4 Reg 5 Req 6 Reg 7 Skipped What is the financial advantage (disadvantage) in total (not per box) if Silven buys 115,000 boxes of tubes from the outside supplier? eBook Print References'1'. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.90 per box. Howr many boxes of tubes should Siluen make? Howr many boxes of tubes should it buy from the outside supplier? EMS Complete this question by entering your answers In the tabs below. Shipped Req l. Req 2 Rec] 3 Req 5 Rec] 6 Rec] 3" 930\" Should Sllven Industries make or buy the tub-es? Print OMake References 03\"? Check my work 3 VULJIVE SUPPIICI: VIVEII LINIS NICE II IIVITIIQUEII, SHIVHIM VIIVEHI IIIMMSWIGS TIIURE VI WHY LITE WIGS: 7. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.90 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? 12 points Complete this question by entering your answers in the tabs below. Skipped Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 eBook What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? (Do not round Print intermediate calculations. Round your answer to 2 decimal places.) References Maximum price per box 3 12 points skipped eBo-ok Prlnt References Complete this quesdon by entering your answers In the tails below. Reg 1 Reg 2 Reg 3 ' Reg 4 Reg 5 Instead of sales of 115,000 boxes of tuba, revised estimates show a \"IE volume of 143,000 boxg of tubes. At this higher sal volume, Sllven would need to rent extra equipment at a cost of $48,000 per year to make the additional 28,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 143,000 boxes of tubes, what is the nancial advantage (disadvantage) In total (not per box) If Silven buys 143,000 boxes of tubes from the outside supplier? Given this new Information, should Sllven Industri make or bu\\_.lr the tubes? Show In"; Make or buyr lhe mixes of tubes

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

Financial & Managerial Accounting

Authors: Jan Williams, Sue Haka, Mark Bettner, Joseph Carcello

15th Edition

0073526991, 9780073526997

More Books

Students also viewed these Accounting questions

Question

the primary substance of which all other things are composed of

Answered: 1 week ago