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Rosie buys her flower pots for $7.00 a pot. Her factory is operating below capacity and she is trying to figure out if she would
Rosie buys her flower pots for $7.00 a pot. Her factory is operating below capacity and she is trying to figure out if she would save money by making the flower pots herself. Below is the estimated fully absorbed unit cost: If Rosie makes the flower pots, fixed overhead costs will not increase and variable factory overhead costs associated with the flower pots are expected to be 75% of direct labor costs. What are the relevant costs of the following? a. direct material $ b. direct labor $ c. factory overhead $ d. should Rosie make these flower pots? yes or no
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