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Please help calculate in house cost savings it says 267 is wrong Davis Kitchen Supply produces stoves for commercial kitchens. The costs to manufacture and
Please help calculate in house cost savings it says 267 is wrong
Davis Kitchen Supply produces stoves for commercial kitchens. The costs to manufacture and market the stoves at the company's normal volume of 6,000 units per month are shown in the following table. $ 55 80 65 Unit manufacturing costs Variable materials Variable labor Variable overhead Fixed overhead Total unit manufacturing costs Unit marketing costs Variable Fixed Total unit marketing costs Total unit costs $ 230 30 75 105 $ 335 Unless otherwise stated, assume that no connection exists between the situation described in each question; each is independent. Unless otherwise stated, assume a regular selling price of $380 per unit. Ignore income taxes and other costs that are not mentioned in the table or in the question itself. Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Reqc Reg D Req E1 Req E2 Req F1 Req F2 A proposal is received from an outside contractor who will make and ship 2,000 stoves per month directly to Davis's customers as orders are received from Davis's sales force. Davis's fixed marketing costs would be unaffected, but its variable marketing costs would be cut by 20 percent for these 2,000 units produced by the contractor. Davis's plant would operate at two-thirds of its normal level, and total fixed manufacturing costs would be cut by 20 percent. What in-house unit cost should be used to compare with the quotation received from the supplier? Assume the payment to the outside contractor is $220. (Round your answer to 2 decimal places.) Show less A In-house cost savings $ 267.00 per unitStep by Step Solution
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