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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%
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
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