Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer ASAP Golfers, Inc. (Gl) manufactures golf-related equipment including golf balls. This year's expected production of golf balls is 80.000 packs (each consisting of

please answer ASAP image text in transcribed
image text in transcribed
image text in transcribed
Golfers, Inc. (Gl) manufactures golf-related equipment including golf balls. This year's expected production of golf balls is 80.000 packs (each consisting of four golf balls). Cost data are as follows: se, eee Packs Per Pack Product costs directly traceable to balls: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead General allocated overhead $2.60 $200,000 1.ee 80, eee 0.15 12, eee 95, 200 23, 2ee $418, 4ee The full cost of one pack of golf balls is $5.23. GI has received an offer from an outside supplier to supply any desired quantity of balls at a price of $5.45 per pack of four golf balls. The cost accounting department has provided the following information: a. The direct fixed manufacturing overhead is the cost of leasing the machine that stamps out the balls. The machine can produce a maximum of 500,000 balls per year. If the balls are bought, the machine will no longer be needed b. No other costs will be affected. Required: 1. Prepare an analysis showing whether I would be better off making or buying the balls at a projected volume of 80,000 packs (320,000 golf balls). (Round "Per Unit" answers to 2 decimal places.) 80,000 packs Make Buy Per Unit Difference Purchase Direct materials Required: 1. Prepare an analysis showing whether GI would be better off making or buying the balls at a projected volume of 80,000 packs (320,000 golf balls). (Round "Per Unit" answers to 2 decimal places.) 80,000 packs Buy Per Unit Make Difference Purchase Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Common costs allocated to this product line Total costs 2-a. At what volume would Gl be indifferent between making and buying? (Do not round Intermediate calculations and round your final answer to nearest whole number.) Indifferent point packs is and found your final answer to nearest whole number.) Indifferent point packs 2-b. What does the indifference point indicate? (Do not round intermediate calculations and round your final answers to nearest whole number.) It will cost more to It will cost more to if the quantity exceeds it the quantity is below packs packs

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

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

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

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

Get Started

Recommended Textbook for

Financial Intelligence For IT Professionals

Authors: Julie Bonner

1st Edition

103215294X, 9781032152943

More Books

Students also viewed these Finance questions