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Golfers, Inc. (GI) manufactures golf related equipment including golf balls. This year's expected production of golf balls is 110,000 packs (each consisting of four golf
Golfers, Inc. (GI) manufactures golf related equipment including golf balls. This year's expected production of golf balls is 110,000 packs (each consisting of four golf balls). Cost data are as follows Per Pack 110.000 Packs Product costs directly traceable to balls Direct materials Direct labour Variable manufacturing overhead Fixed manufactunng overhead General allocated overhead $3.00 120 0.20 $330,000 132,000 22,000 33,000 45 100 562.100 The full cost of one pack of golf balls is $5.11 Gi has received an offer from an outside supplier to supply any desired quantity of balls at a price of $5.40 per pack of four golf balls. The cost accounting department has provided the following information a. The direct fixed manufacturing overhead is the cost of leasing the machine that stamps out the balls The machine can produce a maximum of 500,000 balls per year. If the balls are bought the machine will no longer be needed b. No other costs will be affected Required: 1. Prepare an analysis showing whether GI would be better off malong or buying the balls at a projected volume of 110,000 packs (440,000 golf balls) (Round "Per Unith answers to 2 decimal places.) 110.000 packs Make Per Unit Buy Difference Purchase Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead General allocated overhead Total costs
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