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Please answer with calculation show tq Mimo Ltd manufactures a variety of electric toothbrushes. An outside supplier has offered produce and sell one type of
Please answer with calculation show tq
Mimo Ltd manufactures a variety of electric toothbrushes. An outside supplier has offered produce and sell one type of electric toothbrushes to Mimo Ltd for a cost of 70 per unit. T evaluate this offer, Mimo Engineers has gathered the following information relating to its ow cost of producing the electric toothbrushes internally Per unit Direct material Direct labour Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated 15,000 units per yea 420,000 300,000 90,000 180,000 270,000 1,260,000 28 20 12 18 84 One third supervisory salaries, 2/3 depreciation of special equipments (no sales value), (1/3 traceable supervisor salaries) a. Assuming that the company has no alternative use for the facilities that are now being used to produce the electric toothbrushes, should the outside (12 mark supplier's offer be accepted? Show all computations. b. If the electric toothbrushes were purchased, Mimo Ltd, could use the freed capacity to launch a new product. The segment margin of the new produd would be E150,000 per year. Should Mimo Ltd accept the offer to buy the electric toothbrushes for 70 per unit? Show all computations. (8 marks Step by Step Solution
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