Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversity 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-off) 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 $10 per box Because of excess capacity, no additional fixed manufacturing overhead costs will be incurred to produce the product. However, a $115,500 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 165,000 boxes of Chap-Off, the Accounting Department has developed the following manufacturing cost per box: Direct material Direct labor Manufacturing overhead Total cout $ 4.70 3.00 2.10 $ 9.80 The costs above relate to making both the lip balm and the tube that contains it. As an alternative to making the tubes for Chap Orl Silven has approached a supplier to discuss the possibility of buying the tubes. The purchase price of the supplier's empty tubes would be $2.00 per box of 24 tubes. If Silven Industries stops making the tubes and buys them from the outside supplier, its direct labor and variable manufacturing overhead costs per box of Chifp-off would be reduced by 10% and its direct materials costs would be reduced by 30% Required: 1. 11 Silven buys its tubes from the outside supplier, how much of its own Chap-Off manufacturing costs per box will it be able to avoid? (Hint : You need to separate the manufacturing overhead of $2.10 per box that is shown above into its variable and fixed components to derive the correct answer.) 2. What is the financial advantage (disadvantage) per box of Chap-Off if Silven buys its tubes from the outside supplier? 3. What is the financial advantage (disadvantage) in total (not per box) if Silven buys 165,000 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 165,000 boxes of tubes, revised estimates show a sales volume of 203,000 boxes of tubes. At this higher sales Required: 1. If Sliven buys its tubes from the outside supplier, how much of its own Chap-Off manufacturing costs per box will it be able to avoid? (Hint: You need to separate the manufacturing overhead of $2.10 per box that is shown above into its variable and fixed components to derive the correct answer.) 2. What is the financial advantage (disadvantage) per box of Chap-Off if Silven buys its tubes from the outside supplier? 3. What is the financial advantage (disadvantage) In total (not per box) i Silven buys 165,000 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 165,000 boxes of tubes, revised estimates show a sales volume of 203,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $70,000 per year to make the additional 38,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 203,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) If Silven buys 203,000 boxes of tubes from the outside supplier? Given this new information should Silven Industries make or buy the tubes? 7. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $2.00 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 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6 Req? If Silven buys its tubes from the outside supplier, how much of its own Chap-off manufacturing costs per box will it be able to avold? (Hint: You need to separate the manufacturing overhead of $2.10 per box that is shown above into its variable and fixed components derive the correct answer.) (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Show less Avoidable manufacturing costs per box of Chap-on Req2 > Complete this question by entering your answers in the tabs below. Req1 Reg 2 Reg 3 Reg 4 Reqs Req 6 Req 7 What is the financial advantage (disadvantage) per box of Chap-off if Silven buys its tubes from the outside supplier? (Do not round intermediate calculations. Round your answer to 2 decimal places.) per box Complete this question by entering your answers in the tabs below. ences Reg 3 Reg 4 Reg 1 Reg 2 Reg 5 Reg 6 Req7 What is the financial advantage (disadvantage) in total (not per box) of Silven buys 165,000 boxes of tubes from the outside supplier? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reqs Reg 6 Reg 7 What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? (Do not round Intermediate calculations. Round your answer to 2 decimal places.) Maximum price per box Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req3 Req 4 Reg 5 Ren6 Req 7 Instead of sales of 165,000 boxes of tubes, revised estimates show a sales volume of 203,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $70,000 per year to make the additional 38,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 203,000 boxes of tubes, what is the financial advantage (disadvantage) In total (not per box) if Silven buys 203,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes? Show less Make or buy the boxes of tubes? rences Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 7 Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $2.00 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier? (Round your intermediate calculations to 2 decimal places) Number of boxes of tubes manufactured by Siven Number of boxes of tubes purchased from the outside supplier ces Required 1 Required 2 Required 3 Required 4 Required 5 How much variable overhead cost is incurred to manufacture one unit of each of the company's five products? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Debbie Trish Sarah Mike Variable overhead cont per unit Sewing Kit Complete this question by entering your answers in the tabs below. frences Required 1 Required 2 Required Required 4 Required 5 What is the contribution margin per direct labor-hour for each of the company's five products? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Debbie Trish Sarah Sewing Kit Contribution Margin per DLH Mike Required 1 Required 2 Required 3 Required 4 Required 5 Assuming that direct labor-hours is the company's constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource? (Do not round Intermediate calculations. Round your final answer to a whole dollar amount.) Highest total contribution margin res Required 1 Required 2 Required 3 Required 4 Requlfed 5 Assuming that the company has made optimal use of its 118,450 direct labor-hours, what is the highest direct labor rate per hour that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor time)? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Highest direct labot rate per hour per hour