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please i need solution for this problem, Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repelents, has decided
please i need solution for this problem,
Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repelents, has decided to diversify in order to stabilize sales throughout the year A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin mm After considerable research, a winter products line has been developed. However, Silver's president has decided to introduce only one of the new products for this coming winterIf the product is a success, further expansion in future years will be initiated The product selected called Chap Oil) is a lip balm that will be sold in a lipstick-type tube. The product will be sold to wholesalers in boxes of 24 tubes for $ per box Because of excess capacity, no additional fixed manufacturing overhead costs will be incurred to produce the product. However, a $99.000 charge for fored manufacturing overhead will be absorbed by the product under the company's absorption costing system Using the estimated sales and production of 110,000 boxes of Chap Off the Accounting Department has developed the following manufacturing cost per box $ 5.10 Direct saterial Direct labor Manufacturing overhead Total cost St. The costs above relate to making both the lip balm and the tube that contare it as an alternative to making the tubes for Chap On Silven has approached a supplier to discuss the possibility of buying the tibes The purchase price of the suppliers empty tubes would be $170 per box of 24 tubes ir Siven Industries stops making the tubes and buy them from the outside supplier is direct labo and variable manufacturing overtad costs per box of Chap-off would be induced by 10 and its direct materials costs would be Check my wo and variable manufacturing overhead costs per box of Chap-Ut would be reduced by 10% and its direct materials costs would be reduced by 20% Required: 1. Silven buys Its tubes from the outside supplier how much of its own Chap Ott manufacturing costs per box will be able to avoid? Hint You need to separate the manufacturing overhead of $230 per box that is shown above into its variable and fixed components to derive the correct answer) 2. What is the financial advantage (disadvantage) pet box of Chap Orri Silven buys its tubes from the outside supplier? 3. What is the financial advantage (disadvantage in total inot per box Sliven buys 110,000 boxes of tubes from the outside supplier? 4 Should Silven Industries make or buy the tubes 5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes 6. Instead of sales of 110,000 boxes of tubes, revised estimates show a sales volume of 150,000 boxes of tutes At this higher sales volume, Silver would need to rent extra equipment at a cost of $60.000 per year to make the additional 40,000 boxes of tubes Assuming that the outside supplier will not accept an order for less than 150.000 boxes of tubes, what is the financial advantage (disadvantage) in total not per box) if Siven buys 150,000 boxes of tubes from the outside supplier? Glyen this new information should Silven Industries make or buy the tubes? 7 Refer to the data in Required 6. Assume that the outside supplier is accept an order of any size for the tubes at a price of $170 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier Complete this question by entering your answers in the tabs below Reg! Reg 2 Hea Reg 4 Regs Reco R? What is the financial advantage disadvantage) in total (not per box) i Silver buys 110.000 boxes of tubes from the outside supplier Check Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales throughout the year A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin After considerable research, a winter products line has been developed. However, Silven's president has decided to introduce only one of the new products for this coming winter. If the product is a success further expansion in future years will be initiated The product selected called Chap Of) is a lip balm that will be sold in a lipstick-type tube. The product will be sold to wholesalers boxes of 24 tubes for $11 per box Because of excess capacity, no additional foxed manufacturing overhead costs will be incurred to produce the product. However, a $99.000 charge for fixed manufacturing overhead will be absorbed by the product under the company's absorption costing system Using the estimated sales and production of 10,000 boxes of Chap Or the Accounting Department has developed the following manufacturing cost per box 11 $ 5.20 1.40 Direct waterial Direct Labor Manufacturing overhead Total cost $18. The costs above relate to making both the lip balm and the tube that contains it. As an alternative to making the tunes for Chap on Silven has approached a suppliet to discuss the possibility of buying the tubes. The purchase price of me suppliers emptubes would be $170 per box ot 24 tubes. If Siven Industries stops making the tubes and buy them from the outside supplier is director and variable manufacturing overhead costs per box of Chap-Off would be reduced by to and its direct materials cost would be
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