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need help with the red blanks Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at
need help with the red blanks
Pottery Ranch Inc. has been manufacturing its own finials 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 63% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.59 and $4.97, respectively. Normal production is 32,100 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.37 per unit. If Pottery Ranch accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $49400 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products. Prepare an incremental analysis to decide if Pottery Ranch should buy the finials. (Round answers to o decimal places, e.g. 1250. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Make Buy Increase (Decrease) Direct materials 115239 T 115239 Direct labor Variable overhead costs 100508.31 49400 T 49400 T Fixed manufacturing costs Purchase price (429177) Total annual cost 424684.31 478577 154401 (b)Step by Step Solution
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