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Gollers, 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).
Gollers, 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: Product costs directly traceable to balls: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead General allocated overhead $2.50 $ 1.59 8.20 275.000 165,094 22.000 35,20 51,700 548,900 $ The full cost of one pack of golf balls is $4.99. GI has received an offer from an outside supplier to supply any desired quantity of balls at a price of $5.80 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 Fequired: Prepare an analysis showing whether GI would be better off making or buying the balls at a projected volume of 110,000 packs 40,000 golf balls). (Round "Per Unit" answers to 2 decimal places) 110,000 packs Make Buy Per Unit Difference hase materials Jabour overhead
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