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Please! Answer the Following Correctly! Do not Answer Incorrectly! Thanks Winona Johnson is the president of Johnson Mfg., which manufactures coats. She is trying to

Please! Answer the Following Correctly! Do not Answer Incorrectly! Thanks

Winona Johnson is the president of Johnson Mfg., which manufactures coats. She is trying to decide whether to make 3,000 Type III coats or purchase them from a subcontractor to fill a rush special order that she just received. There are no marketing costs on the special order. Acceptance of the special order would not necessitate any premium pay for overtime work or additional fixed costs. Johnson Mfg. has supplied the following data:

Cost Data for Type 3 Coats:

Sale Price: $42

Direct Materials: $15

Direct Labor: 9

Fixed Mfg. Overhead: 3

Variable Mfg. Overhead: 6

Variable Marketing Costs: 3

Fixed Marketing Costs: 1

Fixed Administrative Overhead: 2 Required:

A. What are the potential strategic issues related to this decision? In addition to the cost information presented in the case, what other data would benefit Ms. Johnson as she makes her decision?

B. Discuss the options Ms. Johnson is facing, incorporating the information from A.

C. (MUST ANSWER) Select a recommendation. Make sure you address how the issues from parts A and B would affect your decision.

Note: Answer every question please, do not answer incorrectly. Thanks!

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