Q1

1 Golfers, Inc (GN mutacules gel d equipment including golf balls. This year's expected production of golf balls is 110,00 palcks ferch conststing of lour golf Cost data are as follows: $ Product costs directly traceable to balls: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead General allocated overhead $2.10 0.90 0.25 ES 231,000 99,000 27,500 26,400 33,000 416,900 $ The full cost of one pack of golf balls is $3.79. GI has received an offer from an outside supplier to supply any desired q at a price of $4.45 per pack of four golf balls. The cost accounting department has provided the following information: a. The direct fixed manufacturing overhead is the cost of leasing the machine that stamps out the balls. The machine maximum of 500,000 balls per year. If the balls are bought, the machine will no longer be needed. b. No other costs will be affected. Required: - Prepare an analysis showing whether GI would be better off making or buying the halls at a projected volume of 40,000 golf balls). (Round "Per Unit" answers to 2 decimal places.)