Grimm Company makes decorative wedding cakes. The company is considering buying the cakes rather than baking them, which will allow it to concentrate on decorating. The company averages 100 wedding cakes per year and incurs the following costs from baking wedding cakes: Fixed costs are primarily the depreciation on kitchen equipment such as ovens and mixers. Grimm expects to retain the equiprment. Grimm can buy the cakes for $25. Should Grimm make the cakes or buy them? Why? If Grimm decides to buy the cakes, what are some qualitative factors that Grimm should also consider? 11. E (Click the icon to view the costs.) 12. 11. Should Grimm make the cakes or buy them? Why? (For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the cakes in-house.) Make Outsource Difference Cake costs cakes cakes (make-outsource) Variable costs: Direct materials Data Table Direct labor Variable manufacturing overhead Purchase cost Direct materials 500 Total differential cost of cakes Direct labor 1,000 Variable manufacturing overhead V continue to make the cakes. Outsourcing will 200 Grimm 1,200 Fixed manufacturing overhead 12. If Grimm decides to buy the cakes, what are some qualitative factors that Grimm should also consider? Total manufacturing cost 2,900 O A. Qualitative factors include contribution margins of the various products produced. 100 Number of cakes O B. Qualitative factors include quality and on-time delivery. 29 Cost per cake C. Qualitative factors include separating fixed and variable costs. OD. Qualitative factors include considering sunk costs and manager's opinions. Print Done Enter any number in the edit fields and then continue to the next question. Grimm Company makes decorative wedding cakes. The company is considering buying the cakes rather than baking them, which will allow it to concentrate on decorating. The company averages 100 wedding cakes per year and incurs the following costs from baking wedding cakes: Fixed costs are primarily the depreciation on kitchen equipment such as ovens and mixers. Grimm expects to retain the equipment. Grimm can buy the cakes for $25. Should Grimm make the cakes or buy them? Why? 11. E (Click the icon to view the costs.) Ir Grimm decides to buy the cakes, what are some qualitative factors that Grimm should also consider? 12. 11. Should Grimm make the cakes or buy them? Why? (For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the cakes in-house.) Make Outsource Difference Cake costs cakes (make-outsource) cakes Variable costs: Direct materials Data Table Direct labor Variable manufacturing overhead Purchase cost Direct materials 500 Total differential cost of cakes Direct labor 1,000 continue to make the cakes. Outsourcing will Variable manufacturing overhead 200 Grimm 1,200 Fixed manufacturing overhead 12. If GI the cakes, what are some qualitative factors that Grimm should also consider? should Total manufacturing cost 2$ 2,900 OA. iclude contribution margins of the various products produced. 100 should not Number of cakes O B. ..iclude quality and on-time delivery. 29 Cost per cake Oc. Qualitative factors include separating fixed and variable costs. O D. Qualitative factors include considering sunk costs and manager's opinions. Print Done Enter any number in the adit fields and then continue to the next question. Grimm Company makes decorative wedding cakes. The company is considering buying the cakes rather than baking them, which will allow it to concentrate on decorating. The company averages 100 wedding cakes per year and incurs the following costs from baking wedding cakes: E (Click the icon to view the Dosts.) Fixed costs are primarily the depreciation on kitchen equipment such as ovens and mixers. Grimm expects to retain the equipment. Grimm can buy the cakes for $25. Should Grimm make the cakes or buy them? Why? 11. If Grimm decides to buy the cakes, what are some qualitative factors that Grimm should also consider? 12. 11. Should Grimm make the cakes or buy them? Why? (For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the cakes in-house.) Difference Make Outsource Cake costs cakes cakes (make-outsource) Variable costs: Direct materials Data Table Direct labor Varlable manufacturing overhead Purchase cost Direct materials 500 Total differential cost of cakes Direct labor 1,000 V Variable manufacturing overhead 200 Grimm continue to make the cakes. Outsourcing will 1,200 Fixed manufacturing overhead ider? 12. If Grimm decides to buy the cakes, what are some qualitative f: decrease profits by $800. Total manufacturing cost 2,900 O A. Qualitative factors include contribution margins of the vario 100 increase profits by $800. Number of cakes O B. Qualitative factors include quality and on-time delivery. 29 Cost per cake O c. Qualitative factors include separating fixed and variable costs. O D. Qualitative factors include considering sunk costs and manager's opinions. Print Done Enter any number in the edit fields and then continue to the next