direct material: $5.00

direct labor: 3.40

manufacturing overhead: 2.10

total cost:10.50

Siven Industries, which manufactures and sets a highly successful line of summer lotions and insect repetients has decided to diversity in order to stabilize sales throughout the year A natural area for the company to consider is the production of winter tions and creams to prevent dry and chapped skin After considerable research a winter products fine has been developed. However, Siven's president has decided to introduce only one of the new products for this coming winter. If the product is a success, further expansion in future years will be nitiated The product selected called Chap Omnis a lip balm that will be sold in a lipstick-type tube. The product will be sold to wholesalers in bones of 24 tubes for $12 per box Because of excess capacity, no additional fixed manufacturing overhead costs will be incurred to produce the product. However, a $110.000 charge for fixed manufacturing overhead wil be absorbed by the product under the company's absorption costing system Using the estimated sales and production of 110,000 bowes of Chap Of me Accounting Department has developed the following manufacturing cost per box Direct material Direct labor Manufacturing overhead Total en $5.00 3.40 2-10 $10.50 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 Ort Siven has approached a supplier to discuss the possibility of buying the tubes. The purchase price of the supplier's empty tubes would be $165 per box of 24 tubes. If Silven Industries stops making the tubes and buys them from the outside suppliers direct labor and variable manufacturing overhead costs per box of Chap Or would be reduced by to and its direct materials costs would be reduced by 20% Required: 1 Silver buys its tubes from the outside supplier, how much of its own Chap Off manufacturing costs per box wat be able to avoid Hint You need to separate the manufacturing overhead of 5210 per box that is shown above to its variable and feed components to delive the correct answer 2 What is the financial advantage disadvantage per box of Chap On Siven buys tubes from the outside supplier What is the financial advantage advantage in total tot per box if Sven buys 110.000 bones of tubes from the outside 4 Should Sven Industries make or buy the tubes 5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes domates show a sales volume of 137.000 besoffes Arthies Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 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 $2.10 per box that is shown above into its variable and fixed components to derive the correct answer.) (Do not round intermediate calculations, Round your answer to 2 decimal places.) Avaldable manutacturing costa per box of Chap-Off Reg Req2 > Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 7 What is the financial advantage (disadvantage) per box of Chap-off if Silver buys its tubes from the outside supplier? (Do not round intermediate calculations. Round your answer to 2 decimal places.) per box Reg 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6 Reg 7 What is the financial advantage (disadvantage) in total (not per box) If Silven buys 110,000 boxes of tubes from the outside supplier? Reg 1 Reg 2 Req 3 Req 4 Reg 5 Reg 6 Reg 7 What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes ? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Maximum price per box Reg 1 Reg 2 Reg 3 Reg 4 Req 5 Reg 6 Reg 7 Instead of sales of 110,000 boxes of tubes, revised estimates show a sales volume of 137,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $47,000 per year to make the additional 27,000 boxen of tubes. Assuming that the outside supplier will not accept an order for less than 137,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 137,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes? Show less Make or buy the boxes of tubes? Reg 1 Req 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 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 $1.65 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.) Number of boxes of tubes manufactured by Silven Number of boxes of tubes purchased from the outside supplier