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G r evenues and costs for the product line Selling price... $200.00 Direct material........... ...50.00 Direct labor... ...75.00 Variable manufacturing overhead....... 8.00 Fixed manufacturing overhead...
G r evenues and costs for the product line Selling price... $200.00 Direct material........... ...50.00 Direct labor... ...75.00 Variable manufacturing overhead....... 8.00 Fixed manufacturing overhead... 6.00 Total Product Cost $139.00 Marketing costs $1,000 of the fixed manufacturing overhead, 1/3 relates to depreciation. 1/3 relates to general company overhead and 1/3 relates to supervisors' salaries. The equipment used to manufacture rocking chairs is specialized and has no resale value Production for the previous year based on sales requires 10,000 chairs. One of AWM's suppliers has offered to sell them the same rocking Chairs for $130.00 each Required: a. What are the relevant costs of both making and buying rocking chairs? b. Should AWM accept the offer and buy chairs from the supplier? T T T Arial : 3 (121) T. E. E
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