Help 60 Subm 9 Problem 13-23 (Algo) Make or Buy Decision (L013-3) 06 point References Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilite sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chopped skin After considerable research a winter products line has been developed. However, Silven's president has decided to introduce only one of the new products for this coming winter if the product is a success. Further expansion in future years will be initiated The product selected called Chap Om is a lip balm that will be sold in a lipstick type tube. The product will be sold to wholesale in boxes of 24 tubes for $9 per box. Because of excess capacity, no additional food manufacturing overhead costs will be incurred to produce the product. However, a $139,500 charge for fived manufacturing overhead wil be absorbed by the product under the company's absorption costing system, Using the estimated sales and production of 155.000 boxes of Chap Orl, the Accounting Department has developed the following manufacturing cost per box Direct material Direct labor 2.60 Manufacturing overhead 1.90 Total cost The costs above relate to making both the lip balm and the tube that contains it. As an alternative to making the tubes for Chap-on Silven has approached a supplier to discuss the possibility of buying the tubes. The purchase price of the suppliers empty tubes would be $135 per box of 24 tubes. If Silven Industries stops making the tubes and buy them from the outside supplier its direct labor and variable manufacturing overhead costs per box of Chap-Off would be reduced by 10% and its direct materials costs would be reduced by 20% Required: 1. If Silven buys its tubes from the outside supplier how much of its own Chap Off manufacturing costs per box will it be able to avoid? (Hint: You need to separate the manufacturing overhead of $190 per box that is shown above into its variable and foed components to derive the correct answer) 2. What is the financial advantage (disadvantage) per box of Chap Of Silven buys its tubes from the outside supplier? 3. What is the financial advantage (disadvantage in total (not per box) ir Siven buys 155,000 boxes of tubes from the outside supplier? 4. Should Silven Industries make or buy the tubes? 5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? 9 06 points Silven has approached a supplier to discuss the possibility of buying the tubes. The purchase price of the suppliers empty tubes would be $135 per box of 24 tubes. If Silven Industries stops making the tubes and buy them from the outside supplier its direct labor and variable manufacturing overhead costs per box of Chap Off would be reduced by 10% and its direct merials costs would be reduced by 20% Required: 1. If Silven buys its tubes from the outside supplier how much of its own Chap Of manufacturing costs per box will it be able to avoid? Hint: You need to separate the manufacturing overhead of $190 per box that is shown above into its variable and fed components to derive the correct answer) 2 What is the financial advantage disadvantage) per box of Chap-Off of Silven buys its tubes from the outside supplier? 3. What is the financial advantage (disadvantages in total (not per box if Silven buys 155,000 boxes of tubes from the outside supplier 4. Should Silven Industries make or buy the tubes? 5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? 6. Instead of sales of 155,000 boxes of tubes, revised estimates show a sales volume of 191,000 bones of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $56,000 per year to make the additional 36,000 boxes of tubes Assuming that the outside supplier will not accept an order for less than 191000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 191000 boxes of tubes from the outside supplier? Given this new information should Silven Industries make or buy the tubes? 7. Refer to the data in Required 6. Assume that the outside supplier wil accept an order of any site for the tubes at a price of $135 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? Book References Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Red Roq Reg RS Red I Silver buys its tubes from the outside supplier, how much of its own Chap-off manufacturing costs per box will be able to avoid? (Hint: You need to separate the manufacturing overhead of $1.90 per box that is shown above into its variable and fixed components to derive the correct answer) (Do not round intermediate calculations. Round your answer to 2 decimal places) Show less Avoidable manufacturing costs per box of Chap On B2) book 5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? 6. Instead of sales of 155,000 boxes of tubes, revised estimates show a sales volume of 191,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $56,000 per year to make the additional 36,000 boxes of tubes Assuming that the outside supplier will not accept an order for less than 191000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 191,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes? 7. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.35 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? References Complete this question by entering your answers in the tabs below. Reg Reg 1 Req2 Reg 3 Req6 Reg 4 Reqs What is the financial advantage (disadvantage) per box of Chap-Off i Sven buys its tubes from the outside supplier (Do not round intermediate calculations, Round your answer to 2 decimal places.) per box ook References What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? 6. Instead of sales of 155,000 boxes of tubes, revised estimates show a sales volume of 191.000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $56,000 per year to make the additional 36,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 191,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 191,000 boxes of tubes from the outside supplier? Given this new information should Silven Industries make or buy the tubes? 7. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubos at a price of $1.35 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier Complete this question by entering your answers in the tabs below. Reg 1 Red 2 Req3 Reg4 Reg 5 Reg Rego What is the financial advantage (disadvantage) in total (not per box) i Silven buys 155,000 boxes of tubes from the outside supplier? ferences SOUUU BOKes of tubes Assuming that the outside supplier will not accept an order for less than 191.000 boxes of tubes, what is the financial advantage (disadvantage) in total not per box) if Silven buys 191,000 boxes of tubes from the outside supplier? Given this new information should Silven Industries make or buy the tubes? 7. Refer to the data in Required 6. Assume that the outside supplier wil accept an order of any size for the tubes at a price of $1.35 per box How many boxes of tubes should Silven make? How many bones of tubes should it buy from the outside supplier? Complete this question by entering your answers in the tabs below. Regi Reg 2 Rega Reg4 Req5 Rego Reg Should Silven Industries make or buy the tubes? Make Buy References volume, Silver would need to rent extra equipment at a cost of $56,000 per year to make the additional 36,000 boxes of tubes Assuming that the outside supplier will not accept an order for less than 191,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 191000 boxes of tubes from the outside supplier? Given this new information should Silven Industries make or buy the tubes? 7 Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $135 por box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplior? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg Reg4 Regs Reg 6 Reg 7 What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? (Do not round Intermediate calculations. Round your answer to 2 decimal places) Maximum price per box (Req4 of tubes 000 boxes of tubes, what is the financial advantage Inot per box) if Silven buys 191,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes? 7. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.35 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? References Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Req 4 Reqs Reg 6 Req 7 Instead of sales of 155,000 boxes of tubes, revised estimates show a sales volume of 191,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $56,000 per year to make the additional 36,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 191,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) ir Silven buys 191,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes? Show less Make or buy the boxes of tubes? References Hater to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.35 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? Complete this question by entering your answers in the tabs below. Reg 1 Reg2 Reg Req4 Reg 5 Reg 6 Reg Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.35 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? (Round your intermediate calculations to 2 decimal places.) Number of boxes of tubes manufactured by Siven Number of boxes of tubes purchased from the outside suppler