Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

CreativeStationary Co., a stationary company, currently produces 15,000 units of fountain pen per year. It is anticipated that their fountain pen production will last for

image text in transcribed
image text in transcribed
CreativeStationary Co., a stationary company, currently produces 15,000 units of fountain pen per year. It is anticipated that their fountain pen production will last for the next three years. Creative Stationary Co. can continue to make the fountain pen on their own. The annual costs are shown in the table below. . item Expense Direct materials $20,000 Direct labor $100,000 Variables overhead (power) $150,000 Fixed overhead (light and heat) $90,000 of CreativeStationary Co. plans to produce the product in-house, annual direct material costs and the fixed overhead will remain at its current level over the next three years. However, the direct labor will increase by $5.000 per year, and variable overhead costs will increase at the rate of 2%. . Instead of making the pen by themselves, a vendor has offered to sell CreativeStationary Co. units of fountain pens for $25 per unit. If Creative Stationary Co. choose to purchase from vendor, some of the manufacturing facilities currently used to manufacture the fountain pen Instead of making the pen by themselves, a vendor has offered to sell CreativeStationary Co. units of fountain pens for $25 per unit. If Creative Stationary Co. choose to purchase from vendor, some of the manufacturing facilities currently used to manufacture the fountain pen could be rented to a third party for $25,500 per year. The MARR is 4%. Question 7 10 pts Question : What is the EAC if the CreativeStationary Co. choose to continue producing the produce in-house? Round to the nearest integer

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

The Audit Of War The Illusion And Reality Of Britain As A Great Nation

Authors: Correlli Barnett

1st Edition

0571280188, 978-0571280186

More Books

Students also viewed these Accounting questions

Question

Why would nation states sponsor cyber espionage?

Answered: 1 week ago