Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

need help with these Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of

need help with these
image text in transcribed
image text in transcribed
image text in transcribed
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 60% 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 26,000 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.25 per unit. If Pottery Ranch accepts the supplier's offer, all variable manufacturing costs will be climinated, but the $46,900 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products. (a) Prepare the incremental analysis for the decision to make or buy the finials. (Enter negative amounts using either a negative sign preceding the number e.s. 45 or parentheses e.g. (45).) Prepare the incremental analysis for the decision to make or buy the finials. (Enter negative amounts using either a nezative sign preceding the number e.g. 45 or parentheses e.3. (45).) (b) Should Pottery Ranch buy the finials? , Pottery Ranch should 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 $37,300? , incomewould by $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions