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Golfers, Inc. ( GI ) manufactures golf - related equipment including golf balls. This year s expected production of golf balls is 8 0 ,
Golfers, Inc. GI manufactures golfrelated equipment including golf balls. This years expected production of golf balls is packs each consisting of four golf balls Cost data are as follows:
Per Pack Packs
Product costs directly traceable to balls:
Direct materials $ $
Direct labour
Variable manufacturing overhead
Fixed manufacturing overhead
General allocated overhead
$
The full cost of one pack of golf balls is $ GI has received an offer from an outside supplier to supply any desired quantity of balls at a price of $ per pack of four golf balls. The cost accounting department has provided the following information:
The direct fixed manufacturing overhead is the cost of leasing the machine that stamps out the balls. The machine can produce a maximum of balls per year. If the balls are bought, the machine will no longer be needed.
No other costs will be affected.
Required:
Prepare an analysis table showing whether GI would be better off making or buying the balls at a projected volume of packs golf ballsRound "Per Unit" answers to decimal places.
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