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Page 1 of 1 MANAGERIAL ACCOUNTING HANDOUT PROBLEM 11 Score Nums Section Problem (10 poluts). Marichal Enterprises, in company that manufactures snil boards, is currently
Page 1 of 1 MANAGERIAL ACCOUNTING HANDOUT PROBLEM 11 Score Nums Section Problem (10 poluts). Marichal Enterprises, in company that manufactures snil boards, is currently operating t 70% capacity, producing 30.000 units a year. To use the capacity, the mannger has been considering the manufacture of its own sails rather than purchasing them from an outside supplier. Currently the company purchases the snils for 5102 cach. Estimates show that the company can manufncture their own sails with the following modufacturing costs: 550 for direct materials, S40 for direct labor, 510 for variable manufacturing overhead, and $30 for fixed manufacturing overbend. With the current capacity available, the company could prixcluce all the required hy incurring an aditional S15.000 in lixed manunturing wwerhead REQUIRED: (1) (2) Should the company make or buy the sails? Prepare an appropriate analysis to support your answer Suppose the company could rent out part of the factory for $50,000 tbat would otherwise be used to manufacture sails. How would your decision change? Prepare an appropriate analysis to support your
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