Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods The con variable manufacturing is charged toproduction at the rate of 70%

image text in transcribed
Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods The con variable manufacturing is charged toproduction at the rate of 70% of direct labor cost, TT eer unit to make a pair of finials are $4 and $5, respectively. Normal production is 30,000 A supplier offers to make a pair of finials at a price of $12.95 per unit. If Pottery Ranch costs will be eliminated, but the $45,000 of fixed manufacturing overhead currently being other products. instructions (a) Prepare the incremental analysis for the decision to make or buy the finials. (b) (c) Should Pottery Ranch buy the finials? Would your answer be different in (b) it the productive capacity released by not mak of $20,000 NOTE: Enter a number in cells requesting a value; enter either a number or a formu (a) Prepare the incremental analysis for the decision to make or buy the finials. Net income Make Buy Increa Direct materials Direct labor Variable overhead costs Fixed manufacturing costs Value Purchase price Value Value Value Value Value Value Value Value Value Value Total annual costs l(b) Should Pottery Ranch buy the finials? (c) Would your answer be different in (b) if the productive capacity released by not eweta o esoeilcced not the finials could be used to produce income of $20,000

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

Step: 3

blur-text-image

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

More Books

Students also viewed these Accounting questions

Question

1. Does your voice project confidence? Authority?

Answered: 1 week ago