n.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/qu ACCOUNTING DDS GA Driver's Lic... X Xfinity G Gmail YouTube Maps Ch 13 HW i Saved 2 Problem 13-25A (Algo) Effects of the level of production on an outsourcing decision LO 13-3 5 Fanning Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. points Fanning produces a relatively small amount (17,000 units) of the cream and is considering the purchase of the product from an outside supplier for $4.60 each. If Fanning purchases from the outside supplier, it would continue to sell and distribute the cream under its own brand name. Fanning's accountant constructed the following profitability analysis: eBook Revenue (17, 000 units x $11.00) 000'28T$ Unit-level materials costs (17,000 units x $1.50) (25, 500) Unit-level labor costs (17,000 units x $0.40) (6, 800 Unit-level overhead costs (17,000 x $0.60) 10, 200 Print Unit-level selling expenses (17,00q x $0. 20) Contribution margin. 141, 100 Skin cream production supervisor's salary (000'25 ) Allocated portion of facility-level costs References Product-level advertising cost (37,000) Contribution to company-wide income $ 40, 090 Required a. Identify the cost items relevant to the make-or-outsource decision. 6. What is the avoidable cost per unit if the outsourcing decision is taken? Should Fanning continue to make the product or buy it from the supplier? c. Suppose that Fanning is able to increase sales by 13,000 units (sales will increase to 30,000 units). Calculate the total avoidable costs. At this level of production, should Fanning make or buy the cream? Complete this question by entering your answers in the tabs below. Required A Required B Required C Identify the cost items relevant to the make-or-outsource decision. Total avoidable costs Required A Required B > 45OF Sunny G O Type here to search2 Fanning Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging. Fanning produces a relatively small amount (17,000 units) of the cream and is considering the purchase of the product from an outside 5 supplier for $4.60 each. If Fanning purchases from the outside supplier, it would continue to sell and distribute the cream under its own brand name. Fanning's accountant constructed the following profitability analysis: points Revenue (17,000 units x $11.00) 000' 28T$ Unit-level materials costs (17,000 units x $1.50) (25, 500) Unit-level labor costs (17,000 units x $0.40) (6, 800) Book Unit-level overhead costs (17, 000 x $0.60) (10, 200) Unit-level selling expenses (17,000 x $0.20) (3, 400 Contribution margin 141, 100 Skin cream production supervisor's salary (52, 000 Print Allocated portion of facility-level costs 12, 100) Product-level advertising cost 000'LE Contribution to company-wide income $ 40,000 References Required a. Identify the cost items relevant to the make-or-outsource decision. b. What is the avoidable cost per unit if the outsourcing decision is taken? Should Fanning continue to make the product or buy it from the supplier? c. Suppose that Fanning is able to increase sales by 13,000 units (sales will increase to 30,000 units). Calculate the total avoidable costs. At this level of production, should Fanning make or buy the cream? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the avoidable cost per unit if the outsourcing decision is taken? Should Fanning continue to make the product or buy it from the supplier? (Round your answer to 2 decimal places. ) per unit Total avoidable costs Should Fanning continue to make the product or buy it from the supplier? Required A Required C > Prev 2 of 3 # Next > Mc 45OF Sunny ~ G O o Type here to search PgUp For... Maps Weather PDF PDF to DOC ( Instagram f Facebook Twitter @ Amazon Wikipedia Yo 1 D21 Quiz List - Science, Society & Em x Question 2 - Ch 13 HW - Connec X D21 Grades - Principles of Accounting X New tab https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/activity/ ACCOUNTING DDS GA Driver's Lic.. X Xfinity G Gmail YouTube Maps Ch 13 HW i Saved 2 Fanning Chemical Company makes a variety of cosmetic products, one of which is a skin cream designed to reduce the signs of aging Fanning produces a relatively small amount (17,000 units) of the cream and is considering the purchase of the product from an outside supplier for $4.60 each. If Fanning purchases from the outside supplier, it would continue to sell and distribute the cream under its own 5 brand name. Fanning's accountant constructed the following profitability analysis: boints Revenue (17,000 units x $11.00) $187, 000 Unit-level materials costs (17,000 units x $1.50) (25, 500 Unit-level labor costs (17, 000 units x $0.40) (6, 800 ) Unit-level overhead costs (17, 000 x $0.60) Book Unit-level selling expenses (17;000 x $0.20) (3, 400 ) Contribution margin Skin cream production supervisor's salary 52, 000 ) (12,100 Print Allocated portion of facility-level costs Product-level advertising cost (37,000) Contribution to company-wide income $ 40,000 References Required a. Identify the cost items relevant to the make-or-outsource decision. . What is the avoidable cost per unit if the outsourcing decision is taken? Should Fanning continue to make the product or buy it from the supplier? c. Suppose that Fanning is able to increase sales by 13,000 units (sales will increase to 30,000 units). Calculate the total avoidable costs. At this level of production, should Fanning make or buy the cream? Complete this question by entering your answers in the tabs below. Required A Required B Required C Suppose that Fanning is able to increase sales by 13,000 units (sales will increase to 30,000 units). Calculate the total avoidable costs. At this level of production, should Fanning make or buy the cream? Total avoidable costs At this level of production, should Fanning make or buy the cream? 45OF Sunny ~ O G Type here to search