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Help solve all 3 requirements! The Sunshine Corporation manufactures cellular modems. It manufactures its own cellular modem cird boards (CMCB), an important part of the
Help solve all 3 requirements!
The Sunshine Corporation manufactures cellular modems. It manufactures its own cellular modem cird boards (CMCB), an important part of the cellular modem. It reports the following cost information abou costs of making CMCBs in 2017 and the expected costs in 2018: (Click the icon to view the costs.) Current Costs in 2017 Expected Costs in 2018 Requirement 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2018. Total Manufacturing Costs of CMCB Manufacturing Cost per Unit Variable manufacturing costs Direct material cost per CMCB Direct manufacturing labor cost per CMCB Variable manufacturing cost per batch for setups, materials handling, and quality control Fixed manufacturing cost Fixed manufacturing overhead costs that can be avoided if CMCBs 1,800 Direct materials Direct manufacturing labor Variable batch manufacturing costs 1,500 are not made 400,000 90,000 Avoidable fixed manufacturing costs Unavoidable fixed manufacturing costs Fixed manufacturing overhead costs of plant depreciation, insurance, and administration that cannot be avoided even if CMCBs are not made Total manufacturing costs 650,000 540,000 0 More Info a Requirements Sunshine manufactured 5,000 CMCBs in 2017 in 25 batches of 200 each. In 2018, Sunshine anticipates needing 9,000 CMCBs. The CMCBs would be produced in 90 batches of 100 each. The Moonbeam Corporation has approached Sunshine about supplying CMCBs to Sunshine in 2018 at $390 per CMCB on whatever delivery schedule Sunshine wants. 1. Calculate the total expected manufacturing cost per unit of making CMCBs in 2018. 2. Suppose the capacity currently used to make CMCBs will become idle if Sunshine purchases CMCBs from Moonbeam. On the basis of financial considerations alone, should Sunshine make CMCBs or buy them from Moonbeam? Show your calculations. 3. Now suppose that if Sunshine purchases CMCBs from Moonbeam, its best alternative use of the capacity currently used for CMCBs is to make and sell special circuit boards (CB3s) to the Electronic Corporation. Sunshine estimates the following incremental revenues and costs from CB3s: Total expected incremental future revenues $2.200,000 Totalanected incremental future costs $2.450,000 On the basis of financial considerations alone, should Sunshine make CMCBs or buy them from Moonbeam? Show your calculations. Print DoneStep by Step Solution
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