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Current Attempt in Progress Wildhorse Company purchases sails and produces sailboats. It currently produces 1.290 sailboats per year operating at normal capacity, which is about
Current Attempt in Progress Wildhorse Company purchases sails and produces sailboats. It currently produces 1.290 sailboats per year operating at normal capacity, which is about 80% of full capacity. Wildhorse purchases sails at $ 253 cach, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $ 92 for direct materials, $ 86 for direct labor, and $ 90 for total manufacturing overhead. The $ 90 total manufacturing overhead includes $ 78,690 of annual fixed overhead that is allocated using normal capacity. The president of Wildhorse has come to you for advice. "It would cost me $ 268 to make the salls," she says. "but only $ 263 to buy them. Should I continue buying them, or have I missed something? Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative stan preceding the number os 45 or parentheses es (451) Make Sails Buy Sails Net Income Increase (Decrease) Direct material Direct labor Variable overhead Prepare a per unit analysis of the differential costs. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) Net Income Increase (Decrease) Make Sails Buy Sails Direct material $ Direct labor Variable overhead Purchase price Total unit cost s Should Wildhorse make or buy the sails? Wildhorse should the sails Should Wildhorse make or buy the sails? Wildhorse should the sails eTextbook and Media If Wildhorse suddenly finds an opportunity to rent out the unused capacity of its factory for $ 93,000 per year, would your answer to part (a) change? This is because the net Income will by s eTextbook and Media
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