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Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify in order to stabilize sales

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Silven Industries, which manufactures and sells a highly successful line of summer lotions and insect repellents, has decided to diversify 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 $80,500 charge for flixed manufdcturing overhead will be absorbed by the product under the company's absorption costing system. Using the estimated sales and production of 115,000 boxes of Chap-Off, the Accounting Department has developed the following manufacturing cost per box: 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-Off, Silven has approached a supplier to discuss the possibility of buying the tubes. The purchase price of the supplier's empty tubes would be $1.90 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 Chap-Off would be reduced by 15% and its direct materials costs would be reduced by 30%. Required: 1. If Siven buys its tubes from the outside suppler, 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 $170 per box thot 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 115,000 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 poy the outside supplier for a box of 24 tubes? 6. Instead of sales of 115,000 boxes of tubes, revised estimates show a sales volume of 138,000 boxes of tubes. At this higher sales volume, Sliven would need to rent extra equipment at a cost of $43,000 per year to make the additional 23,000 boxes of tubes. Assuming that the outside supplier will not accept an order for lest than 138,000 boxos of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 138,000 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 $1.90 per box. How many boxes of tubes should Siven make? How many boxes of tubes should it buy from the outside supplier? Complete this question by entering your answers in the tabs below. If silven buys its tubes from the outside supplier, how much of its own Chsp-off manufacturing costs per box will it be able to avold? (Hint You need to separate the manufacturing overhead of $1.70 per box that is shown above into its variable and fixed components to derive the correct answer.) (0o not round intormediate calculations. Round your answer to 2 dacimal places Required: 1. 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 avoid? (Hint: You need to separate the manufacturing overhead of $1.70 per box that is shown above into its variable and fixed components to derive the correct answer.) 2. What is the financlal advantage (disadvantage) per box of Chap.OIf if Siven buys its tubes from the outside supplier? 3. What is the financial advantage (disadvantoge) in total (not per box) if Siven buys 115,000 boxes of tubes from the outside supplier? 4. Should Siven Industries make or buy the tubes? 5. What is the maximum price that Sliven should be willing to pay the outside supplier for a box of 24 tubes? 6. Instead of sales of 115,000 boxes of tubes, revised estimates show a sales volume of 138,000 boxes of tubes, At this higher sales volume, Silven would need to rent extra equipment at a cost of $43,000 per year to moke the additional 23,000 boxes of tubes. Assuming thot the outside supplier will not accept an order for less than 138,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 138,000 boxes of tubes from the outside supplier? Given this new information, should Siven Industries make or buy the tubes? 7 . Refer to the dote in Required 6 . Assume thot the outside supplier will accept an order of any size for the tubes at a price of $1.90 per box. How many boxes of tubes should Siven make? How many boxes of tubes should it buy from the outside supplior? Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) per box of Chap-Orf if Siven buyt its tubes from the outside supplien? (Po not reund intermediate calculobions. Round your answer to 2 decimal places,) equired: 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 avoid? Iint: You need to separate the manufacturing overhead of $1.70 per box that is shown above into its variable and fixed components to erive the correct answer.) What is the financial advantage (disadvantage) per box of Chap-Off if Silven buys its tubes from the outside supplier? What is the financial advantage (disadvantage) in total (not per box) if Silven buys 115,000 boxes of tubes from the outside supplier? Should Silven Industries make or buy the tubes? . What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? 5. Instead of sales of 115,000 boxes of tubes, revised estimates show a sales volume of 138,000 boxes of tubes. At this higher sales colume. Siven would need to rent extro equipment at a cost of $43,000 per year to make the additional 23,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less thon 138,000 boxes of tubes, what is the financial advantage disodvantage) in total (not per box) if Silven buys 138,000 boxes of tubes from the outside supplier? Given this new information, should Siven Industries make or buy the tubes? 7. Refer to the dato in Required 6 . Assume that the outside supplier will accept an order of any size for the tubes at a price of $1,90 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. What is the financial advantage (disadvantage) in total (not per box) if Silven buys 115,000 boxes of tubes from the outside supplier? Required: 1. If Silven buys its tubes from the outside suppler, 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 $1.70 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 (disodvantage) in total (not per box) if Silven buys 115.000 boxes of tubes from the outside supplier? 4. Should Silven Industries make or buy the tubes? 5. What is the maximum price that Siven should be willing to pay the outside supplier for a box of 24 tubes? 6. Instead of sales of 115,000 boxes of tubes, revised estimates show a sales volume of 138,000 boxes of tubes. At this higher sales volume, Siven would need to rent extra equipment at a cost of $43,000 per year to make the additional 23,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 138,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 138,000 boxes of tubes from the outside supplier? Given this new information, should Siven Industries make or buy the tubes? 7. Refer to the data in Required 6. Assume that the outside suppller will accept an order of any size for the tubes at a price of $1.90 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. Should Siven Industries make or buy the tubes? Required: 1. 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 avoid? (Hint: You need to separate the manufacturing overhead of $1.70 per box that is shown above into its variable and fixed components to derive the correct answer.) 2. What is the financial advontage (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 Siven buys 115.000 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 115,000 boxes of tubes, revised estimates show a sales volume of 138,000 boxes of tubes. At this higher sales volume, Silven would need to rent extro equipment at a cost of $43,000 per year to make the additional 23,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 138,000 bewes of tubes, what is the financial advantage (disadvantoge) in total (not per box) if Silven buys 138,000 boxes of tubes from the outside supplier? Given this new information, should Siven industries make or buy the tubes? 7. Refer to the coto in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.90 per box. How many boxes of tubes should Siliven make? How many boxes of tubes should it buy fiom the outside supplier? Complete this question by entering your answers in the tabs below. What is the maximum price that silven should be willing to pay the outside suppler for a box of 24 tubes? (Do not round intormediate calculations, Round your answer to 2 decimal ploces.) Jisadvantage) in total (not per box) if Silven buys 138,000 boxes of tubes from the outside supplier? Given this new information, should silven Industries make or buy the tubes? Refor 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 $1.90 per ox. 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. 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 $1.90 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.) \begin{tabular}{|l|} \hline Number ol boxes of tubes manufactured by silven \\ \hline Number of bexes of tubes purchased from the outside suppler \\ \hline \end{tabular} (disadvantage) in total (not per box) if Silven buys 138,000 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 $190 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. Instead of sales of 115,000 boxes of tubes, revised estimates show a sales volume of 138,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $43,000 per year to make the additional 23,000 boxes of tubes, Assuming that the outside supplier will not accept an order for less than 138,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 138,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes

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