Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hawley Company makes decorative wedding cakes. The company is considering buying the cakes rather than baking them, which will allow it to concentrate on decorating.

image text in transcribed

Hawley 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: (Click the icon to view the costs.) Fixed costs are primarily the depreciation on kitchen equipment such as ovens and mixers. Hawley expects to retain the equipment. Hawley can buy the cakes for $21. 11. Should Hawley make the cakes or buy them? Why? 12. If Hawley decides to buy the cakes, what are some qualitative factors that Hawley should also consider? Variable costs Direct materials i Data Table Direct labor Variable manufacturing overhead Purchase cost Direct materials Direct labor Variable manufacturing overhead 575 875 125 1,250 Total differential cost of cakes Hawley continue to make the cakes. Outsourcing will Fixed manufacturing overhead Total manufacturing cost $ 2,825 12. If Hawley decides to buy the cakes, what are some qualitative factors that Hawley should also conside Number of cakes - 100 $ 28 Cost per cake O A. Qualitative factors include separating fixed and variable costs. OB. Qualitative factors include quality and on-time delivery. OC. Qualitative factors include contribution margins of the various products produced. 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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Understanding And Practice

Authors: Robert Perks

3rd Edition

0077124782, 9780077124786

More Books

Students also viewed these Accounting questions