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Outsourcing Dough, Re , Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or
Outsourcing Dough, Re Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or to outsource. If the company outsources, they will eliminate all of the variable overhead and of the fixed manufacturing overhead, but will incur shipping costs. Use the information below to determine whether Dough, Re Mi Inc should outsource or not. Data Sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead MOH : Avoidable fixed MOH Unavoidable fixed MOH Sales commissions Advertising costs Purchase price of outsourced product Shipping costs of outsourced product per unit per unit per unit per unit per month per month per month per unit per month per unit per unit Costs per unit Incremental analysis Variable costs Direct materials Direct labor Variable manufacturing overhead Purchase price Shipping costs Sales commissions Total variable costs Fixed costs Fixed manufacturing overhead Advertising Total fixed costs Incremental cost table If Dough, Re Mi outsources, what would its incremental profit loss per unit equal? If Dough, Re Mi outsources, what would its incremental profit loss given the expected units above? Should Dough, Re Mi Inc, manufacture or outsource its dough? B Cell Formulas na na na na na na na table
Outsourcing
Dough, Re Mi Inc. sells many different types of cookie dough. The company is deciding whether to continue making its own dough or to outsource. If the company outsources, they will eliminate all of the variable overhead and of the fixed manufacturing overhead, but will incur shipping costs. Use the information below to determine whether Dough, Re Mi Inc should outsource or not.
Data
Sales price
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead MOH :
Avoidable fixed MOH
Unavoidable fixed MOH
Sales commissions
Advertising costs
Purchase price of outsourced product
Shipping costs of outsourced product
per unit
per unit
per unit
per unit
per month
per month
per month
per unit
per month
per unit
per unit
Costs per unit
Incremental analysis
Variable costs
Direct materials
Direct labor
Variable manufacturing overhead
Purchase price
Shipping costs
Sales commissions
Total variable costs
Fixed costs
Fixed manufacturing overhead
Advertising
Total fixed costs
Incremental cost
table
If Dough, Re Mi outsources, what would its incremental profit loss per unit equal?
If Dough, Re Mi outsources, what would its incremental profit loss given the expected units above?
Should Dough, Re Mi Inc, manufacture or outsource its dough?
B
Cell Formulas
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