Answered step by step
Verified Expert Solution
Question
1 Approved Answer
help Pottery Ranch Inc. has been manufacturing its own funials for its curtain rods. The company is currently operating at 100% of capacity, and variable
help
Pottery Ranch Inc. has been manufacturing its own funials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 62% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 30,400 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.15 per unit. If Pottery Ranch accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $43,100 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed b\$ other products. (a) Prepare the incremental analysis for the decision to make or buy the finials. (Enter negative amounts using either a negative sisn preceding the number e. -45 or parentheses e g (45).) Should Pottery Ranch buy the finials? Pottery Ranch should the finials (c) Would your anwer be different in (b) if the productive capacity released by not making the finials could be used to produce incorne of \$38.620? Should Pottery Ranch buy the finials? . Pottery Ranchshould the finials. (c) Would your answer be different in (b) if the productive capacity released by not making the finials could be used to produce income of $38,620 ? income would bys Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started